Roundup: RSI(2)
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.
Extreme RSI(2) Readings Becoming Less Common
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.
Happy Trading,
ms
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Filed under: Trading Strategies | 3 Comments
Have you tested the DVI oscillator? CSS is thrilled about it. I wasn’t able to find the formula to test it myself – do you know where it is to be found? Thanks.
RE to djg: I was under the impression that all those indicators are black boxed. Good question though – I’ll email David to confirm. michael
Black box indicators are all fine and good if you are using the platform for which they are written, but the rest of us we need to be able to code them in. Besides, I cat in the bag kinds of tools make me very nervous.