RSI 2 Period Trading Strategy... Explained For Beginners.
Doesn't work
No edge after realistic trading costs
- trades tested
- 147
- per trade after costs
- -6.7bp
- winners
- 62%
- years of data
- 14.7
Larry Connors' RSI(2) pullback system on the daily chart: above the 200-day moving average buy when the 2-period RSI is below 10, below it sell when RSI(2) is above 90. Exit when price moves back across the 5-day simple moving average; Connors uses no stop loss.
The exact rules we tested
- 01Instrument: EURUSD | Signal timeframe: 1d | Direction: both
- 02LONG when: rsi2 < 10
- 03SHORT when: rsi2 > 90
- 04Long filter: close > sma200
- 05Short filter: close < sma200
- 06Entry: market at the signal bar's close
- 07Stop: none (as taught - the trade closes only on its exit rule)
- 08Entry fills at the signal bar's close (market-on-close)
- 09Exit signals fill at that bar's close (market-on-close)
- 10Exit longs when: close > sma5
- 11Exit shorts when: close < sma5