This is a roundup of our key posts talking about the RSI(2) indicator. Most of these are a little dated (apologies), but I needed a central location I could link to when mentioning the indicator.
Summary: at this moment in history, the RSI(2) indicator is contrarian: low readings portend bullish returns, and high readings bearish returns, but this has only been true since about the turn of the century.
Summary: (a) a two-day RSI has been more predictive than longer variations such as RSI(3) or RSI(4), and (b) the “deeper” RSI(2) travels into oversold/overbought territory, the more predictive it has become.
Summary: a simple strategy that scales into positions based on how deep RSI(2) travels into oversold/overbought territory.
Summary: as the market has become more contrarian in the short-term, very high and low RSI(2) readings have become much less common.
Summary: a quick test of how the RSI(2) indicator performed in a very interesting year for short-term mean-reversion.
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