ashraf999
33 posts
msg #44940
- Ignore ashraf999
modified |
6/14/2006 5:02:19 AM
I have read some of your posts regarding RSI(2) and decided to test it on some of the selected stocks based on your following filter:
I found that the vast majority of the stocks - if not all - I tested failed it. However, I found that once the RSI(2) < 0.2 or even < 0.1, there is better chance the stocks' dowtrend will end. For some stocks, RSI(2) needs to get alot lower than 1 in order to start a reversal. Check the gold stocks as a clear example of this. What can you say about this?
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TheRumpledOne
6,407 posts
msg #44944
- Ignore TheRumpledOne |
6/14/2006 11:15:17 AM
What can I say?
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!
You must learn to TRADE.
Filters only select candidates for trading.
You must learn to recognize when it is time to enter long.
If you check my posts, you'll see I have answered this over and over and over again.
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mantis2k4
20 posts
msg #44947
- Ignore mantis2k4 |
6/14/2006 12:08:33 PM
Use your filter for bull markets and
for markets like we're in now. Take TRO's concepts and apply them to a complete stradegy, one that accounts for overall market direction.
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nikoschopen
2,824 posts
msg #44949
- Ignore nikoschopen |
6/14/2006 12:30:33 PM
Or, if you were like me, you would wait and see whether any of those stocks actually follow through in the coming days. Since they're all pretty badly trashed stocks to begin with, it's a safe bet to wage a full scale war by going "short" on those that can't foot their own redemption.
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TheRumpledOne
6,407 posts
msg #44967
- Ignore TheRumpledOne |
6/14/2006 8:24:29 PM
When stocks like AAPL, GOOG, HANS, SONS, SIRI, etc... have RSI(2) < 1, that's what gets my attention.
Good stocks bottoming rather than P.O.S. stocks is what you want to trade.
HTH.
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alf44
2,025 posts
msg #44969
- Ignore alf44 |
6/14/2006 8:30:15 PM
TRO,
Surely, you must agree..."RSI(2) < 1"...DOES NOT imply..."good stocks (or, BAD STOCKS for that matter) bottoming" !!!
Just an observation !
Regards,
alf44
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builderer
13 posts
msg #44975
- Ignore builderer |
6/14/2006 11:03:50 PM
As a newbe what does P.O.S. mean? There should be an anacranism dictionary.
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ashraf999
33 posts
msg #44984
- Ignore ashraf999 |
6/15/2006 3:32:38 AM
I agree with alf44.
TheRumpledOne,
Your rule is indeed good for observation. But I believe it needs adjusting a little more. If you daytrade, it would not matter if the stock you were hunting is good or "trashed".
Hit and run...that is how it works.
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ashraf999
33 posts
msg #44985
- Ignore ashraf999 |
6/15/2006 3:44:58 AM
Look at this one.
Despite RSI<1, the stock price kept going lower. RSI(2) is now at 0.03!
http://stockcharts.com/h-sc/ui?s=tmy&p=D&yr=0&mn=1&dy=0&id=p04409184746
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nikoschopen
2,824 posts
msg #44997
- Ignore nikoschopen |
6/15/2006 11:17:29 AM
ashraf999,
Even as a non-RSI(2) techie, I wouldn't jump so quickly to conclude that RSI(2) < 1 as a system needs to be trashed. Believe me, the system works and it works remarkably well in a strongly trending bull market. But as I stated above, this is not the case in a bear market. Had you used this system in the 2000-20003 bear market, you would be long gone by now—even if you had solely focused on "good" stocks. However, I agree with TRO that you must learn to differentiate between the good, the bad, and the ugly before attempting to make a killing in this shifting climate.
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