Looking to set up automated trading of Larry Connors RSI 2 system

I wonder how well this will work when combined with my Spectro Indicator strategy? Before looking at the details, note that this article is designed to educate chartists on possible strategies. No trade were initiated, so I gave up at that time. Apologies, I was away for a few days and only saw your messages now. What sort of returns was it generating?

The RSI-2 Strategy is designed to use on Daily Bars, however it is a short term trading strategy. The average length of time in a trade is just over 2 days. But the results CRUSH the general market averages. Detailed Description of Rules For RSI-2 System are In The First Post. Also Provided are General Results Testing Stocks and Forex.


I wonder how well this will work when combined with my Spectro Indicator strategy? Hi Chris, Quick question on this. I would like to know where the PDF link is? I am not seeing it on the post anywhere.

I found the PDF link here: Could re-upload your PDF please? Conversely, traders can look for short-selling opportunities when 2-period RSI moves above This is a rather aggressive short-term strategy designed to participate in an ongoing trend.

It is not designed to identify major tops or bottoms. Before looking at the details, note that this article is designed to educate chartists on possible strategies. We are not presenting a standalone trading strategy that can be used right out of the box. Instead, this article is meant to enhance strategy development and refinement.

There are four steps to this strategy and levels are based on closing prices. First, identify the major trend using a long-term moving average. Connors advocates the day moving average. Traders should look for buying opportunities when above the day SMA and short-selling opportunities when below the day SMA. Second, choose an RSI level to identify buying or selling opportunities within the bigger trend. Connors tested RSI levels between 0 and 10 for buying, and between 90 and for selling. In other words, the lower RSI dipped, the higher the returns on subsequent long positions.

For short positions, the returns were higher when selling-short on an RSI surge above 95 than on a surge above In other words, the more short-term overbought the security, the greater the subsequent returns on a short position. The third step involves the actual buy or sell-short order and the timing of its placement. Chartists can either watch the market near the close and establish a position just before the close or establish a position on the next open.

There are pros and cons to both approaches. Connors advocates the before-the-close approach. Buying just before the close means traders are at the mercy of the next open, which could be with a gap. Obviously, this gap can enhance the new position or immediately detract with an adverse price move. Waiting for the open gives traders more flexibility and can improve the entry level.

The fourth step is to set the exit point. This is clearly a short-term trading strategy that will produce quick exits. Horance 3 weeks ago. Nicolas 3 weeks ago. Nicolas 4 weeks ago. Barrabas15 1 month ago. ALE 2 months ago. Nicolas 3 months ago. SoloContado If you smooth the signal using a "summation" function, you get a nice "crossing of 0" graph Despair 4 months ago. Bard Cheers for doing Ehler's latest indicator Despair, much appreciated.

AlexF 5 months ago. Doctrading 6 months ago. Daniel da Costa Thanks Doc! Where can you find a service for Dax with a 1 point spread? Matriciel 6 months ago. Nicolas 7 months ago. Leider rechnet er bei mir nicht die Pe Nicolas 8 months ago.

I want to take a closer look at the 2-period RSI indicator and see if we can improve the basic trading model by Larry Connors. Modified Trading Model Back in the year I explored the robustness of the trading parameters used by the 2-period RSI trading model. “Even though we do not suggest using only one indicator, if one had to, the 2-period RSI would be the indicator.”-Larry Connors in How Markets Really Work. Larry Connors is an experienced trader and publisher of trading research. The system uses a simple RSI indicator working on a period of 2 days along side a day EMA Notes for this Trading Account: This is an interpretation of Larry Connors RSI 2 strategy.