As I've always been a fan of RSI(2) and that I've been very bearsish on the market for quite awhile now,back some time ago I decided to try an experiment (on paper) to see what would happen if one was to buy these 4 bear etf's on a drop under 10 on the RSI(2).
So buying these 4 on that drop shows these results,please note the "exit" prices are perfect and could never be achieved but it shows that one could grab a hefty chunk of the middles out of these runs.
The "exit" price is the highs of these runs,play around with it if it looks interesting.
FAZ
11/26 61.40
12/1 80
12/8 36.60
12/12 56.5
12/31 35.7
1/20 88
1/28 39.30
2/5 59.70
2/6 41
2/20 86
3/10 61.5
no exit yet,current price 35
unrealized gain so far (because of the open trade) on 100 shares traded = $12,970
TZA
11/26 73
12/1 95
1/2 46
1/20 66.60
1/28 49.8
2/2 62
2/6 49.3
3/9 113.5
3/12 73.7
no exit yet,current price 65.70
unrealized gain so far (because of the open trade) on 100 shares traded = $11,100
SRS
11/26 111
12/1 153
12/8 72
12/12 97
1/28 49
3/6 111
3/10 70.50
no exit yet,current price 70.90
unrealized gain so far (because of the open trade) on 100 shares traded = $12,940
SFK
9/26 96
10/10 205
11/4 111
11/21 304
11/26 142
12/1 175
12/8 103
12/12 141
12/31 103
1/20 200
1/28 120
2/5 163
2/26 126
3/6 268
3/10 181
no exit yet,current price 129
unrealized gain so far (because of the open trade) on 100 shares traded = $60,300
That's about $97,000 on these 4,but like I said,these exits could never be achieved,but just taking even 1/2 or 1/3 of these middles isn't bad.
Also remember you must feel the bearsish trend still in place to make this work,RSI(2) under 10 won't help if the market turns bull,if it does then it's probably time to use it on FAS and the other opposite etf's.
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5 comments:
Great post, Muddy. I ran a quick backtest in SF with exits set to 10% gain or 10% loss and still got some decent results.
SF Filter:
SYMLIST(FAZ,TZA,SRS,SFK) /* enter whatever tickers you want to calculate here*/
and RSI(2) below 10
Backtest Results:
Trade Statistics
There were 23 total stocks entered. Of those, 21 or 91.30% were complete and 2 or 8.70% were open.
Of the 21 completed trades, 15 trades or 71.43%resulted in a net gain.
Your average net change for completed trades was: 4.29%.
The average draw down of your approach was: -6.78%.
The average max profit of your approach was: 13.73%
The Reward/Risk ratio for this approach is: 2.50
Annualized Return on Investment (ROI): 542.20%, the ROI of ^SPX was: -31.49%.
Exit Statistics
Stop Loss was triggered 6 times or 28.57% of the time.
Stop Profit was triggered 15 times or 71.43% of the time.
Trailing Stop Loss was triggered 0 times or 0.00% of the time.
You held for the maximum period of time (25 days) 0 times or 0.00% of the time.
An exit trigger was executed 0 times or 0.00% of the time.
RSI[2]??? You kidding me?
Never use RSI[2] for swing trades. RSI2 is for daytrades or intraday trades.
If you are a swing trader, use RSI 5 or RSI 14.
All of you should work for Nasa with the types of scans you run. Does RSI(2) mean looking at the RSI over 2 days? Yeah, I have a ton to learn. Thanks for the posts!
Evan
Hey Anon..
no i'm not kidding you,are you kidding me,on the ultras using RSI14?
And RSI5,that's pretty close to 2,huh
Sounds like something you read in a book...I wasn't talking about swinging normal stocks with your 14.
In the 4 months it's been around FAZ range of RSI14 has been from 72 to 35
4 MONTHS,tell me how do you trade that?
Thanks for the laugh btw.
Comon,make up something of how you trade that range.
Muddy don't let out the secret of rsi(2). You'll ruin it. Anon is right... never use rsi(2) only a fool would do that.
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