RSI(2) - The Little Indicator That Could - StockFetcher.com Stock Screener

StockFetcher Forums · Filter Exchange · RSI(2) - The Little Indicator That Could

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TheRumpledOne 6,529 posts msg #35432 - Ignore TheRumpledOne	3/23/2005 7:51:03 PM Judge.. not sure what you are asking... I do believe I have posted just about all there is to say about rsi(2). It is simple... It works. The filter selects the stocks but you have to trade them. Just wait for green. That's all there is. If you buy when they are still red, don't blame rsi(2). MAY ALL YOUR FILLS BE COMPLETE.
TheRumpledOne 6,529 posts msg #35433 - Ignore TheRumpledOne	3/23/2005 8:09:05 PM Hey Judge.. instead of backtesting something that we know works... spend that time on this: Optionetics Articles MARKET INSIGHT: Money Management http://www.optionetics.com/articles/article_full.asp?idNo=8558 By Jody Osborne, Optionetics.com 6/19/2003 7:30:00 AM We can find a lot of information about trading in books and on the Web, but most of it details how to pick stocks and what strategies that are available using options. However, one very important aspect of trading is often overlooked and this is money management. I often get the question, �Why did such and such stock move against us when everything was pointing at a good trade?� Trading is not an exact science; if it were, there would not be a market because everyone would know how to win. In sports, a team can often play a great game and still lose. The same thing can occur in trading. We can have all the odds in our favor, yet the stock will move against us. Despite the fact that many trades will lose money, if we manage our trades appropriately, we can still make nice profits. In fact, we can make money trading even if our winning percentage is below 50 percent. In just a moment, I am going to discuss how this is possible. However, before we go into some money management techniques, we need to realize that we are going to have losing trades. Even the best baseball team doesn�t win every game. In fact, a 60 percent winning percentage is considered great in the sport. This is similar to the options game, where a person who wins 60 percent of their trades should come out well ahead of the game. Too many traders enter a trade without any idea of when they will get out. Not only should we have a profit exit set, but we should also have a loss target set. With some strategies, we might be willing to risk the entire capital used, while others we might have a mental stop loss in place. Regardless of where your targets reside, it is important to have them ahead of entering the trade. This is because emotion will dominate our trading decisions if we don�t have an idea of what to do ahead of time. Now, just to show that we don�t have to be right every trade, let�s take a look at a table showing the profits made using various winning percentages. There is an old saying that states �Let your profits run and cut your losses short.� It is this basis that gives us the following table. Winning % Ave Win Tot Win Ave Loss Tot Loss # of Trades Profit 40% $500 $4,000 $250 $3,000 20 $1,000 50% $500 $5,000 $250 $2,500 20 $2,500 60% $500 $6,000 $250 $2,000 20 $4,000 Table 1: Profits Using Various Winning Percentages Notice that by having a 2-to-1 win to loss ratio, we would have profits even if we only win 40 percent of the time. It is also important that we allocate an equal amount of capital to each trade. Many traders will put large amounts of money into trades they think are the best. However, if this trade doesn�t pan out, it can erase the gains made from other trades. There are various strategies to manage your trading account, but the key is to have a plan. The idea is to �plan your trade and trade your plan.� This means knowing ahead of time where our exits lay and keeping a good record of the trades we have made in the past. Though we can�t win every time, we can learn to manage our money better so that the losses aren�t a problem for the long-term performance of our trading account. Jody Osborne Senior Writer & Options Strategist Optionetics.com ~ Your Options Education Site Visit Jody's Forum
marine2 963 posts msg #35438 - Ignore marine2	3/23/2005 11:29:26 PM Listen, I have never said I don't believe in what your saying concerning your beloved RSI(2) filtering system. I just wanted you believers to convince everyone else in here. So far, you have done your very best in that. I do have 3 different filters that use the RSI(2) theory but with different conditions set within each to control the number of stocks each finds ripe for possible trading. I enjoy testing you guys and so far you believers haven't wavered in your loyalty to your convictions. Wishing you all tons of successful trades and many years of healthy living. Marine2
rsarno 103 posts msg #35439 - Ignore rsarno	3/23/2005 11:34:53 PM judge thank you for sharing your filter, the results are stunning and worth taking a look at. i am one who doesnt have much faith in RSI(2) despite everything i hear, but i have not really played with it too much. I too am a systems trader at heart, but have not yet found a system worth trading live. I have some good projects if your interested in chatting? im on AOL as RSARNO or email me rsarno (@) aol.com
jclaffee 81 posts msg #35440 - Ignore jclaffee	3/24/2005 1:45:07 AM Hi, rsarno: What's NOT to "have faith in" where the RSI(2) scan is concerned? It identifies issues that trade enough volume to provide liquidity and are making a first move North from an absolute capitulation bottom. You get a chance to buy low. How long will the move last and how far will it go? Only the market knows! Jim
TheRumpledOne 6,529 posts msg #35454 - Ignore TheRumpledOne	3/24/2005 10:39:55 PM FAITH? Trading is not about FAITH, it's about SKILL! Save faith for religion... faith is a belief in something that you can't prove. RSI(2) PROVES ITSELF EVERYDAY... WAKE UP AND SMELL THE PROFITS!
rsarno 103 posts msg #35455 - Ignore rsarno	3/24/2005 10:47:36 PM when i said that, i meant i have not looked at it enough to decide how i feel. i have been trying to learn the muddy method exclusively, and it is difficult for me to stray and learn bits and peices of different things, such as RSI(2) muddy method consists of ONLY fast stoch, i cannot keep switching channels lol. also i have so much on my plate right now im not even trading muddy method, due to family issues.
marine2 963 posts msg #35462 - Ignore marine2	3/25/2005 11:57:26 PM The previous comment, "Trading is not about FAITH, it's about SKILL!" is interesting but not true. I would say this, if you don't have faith in your trading skills then you need to refocus your efforts on honing those skills where the faith will come to you and drives you to that success your striving for. To say trading doesn't involve faith (faith = confidence, trust, assurance, sureness, certainty etc) is like saying you can drive your car without a steering wheel. Therefore, trading does require skill, faith, discipline, persistence, a plan, and a postive spirit. Study hard, give it your best effort, and never let a loss get you down but learn from it. If RSI(2) system is your filtering tool of choice, great. But, if you have another filtering tool of choice you're more comfortable with so be it. Find the one best suited to your style of trading and go for it. Never let anyone tell you that one way is the only way. That is narrow thinking which is ridiculous. Happy Investing! Marine2
judgetrade 107 posts msg #35467 - Ignore judgetrade	3/26/2005 4:20:48 PM TheRumpledOne, I have not asked a question, just want to describe how I want to trade it after testing it. The screen is not from me, I got it from within this board (can not remember the post) and tweaked it. The system is profitable, even if you do not wait for green, I am not sure, but it might even add to the bottom line since you do get the positive gap up, which you can not trade if you wait for green, but I have not backtestet this. I even would like to wait for green but I can not since I am trading from europe and I have an every day job. What really shockes me (in a positive way): I have designed several systems that are based on panik selling with very high performance and I am trading them sucessfully. But the thing is: the systems I have designed so far only work when the market is in an uptrend. Since Jan. 14. of this year, I have a sell signal and my money is in money market funds. What I have seen so far (I tested 2004, 2005 and 1997) from the sreen I have posted, it produces a fantastic capital curve line with very low maximum drawdown, especially with fixed fractional bet size and a 25% Stop Loss per position even in downtrendig markets. (Though reality is never as good as backtesting). Further more: I order to trade a system sucessfully you not have to convince your rational parts of your brain, you also have to convince the rest (which is 100 times bigger, at least in my brain :-)) that takes time, so I backtest, real-time test it until I dream at nights about it, and then jump in with a very small bet size and rules I can repeat by heart and implement automatically even after a bottle of white rum. I know it works to buy panik selling but stockfetcher is a new environment for me and I have to test the water otherwise I will get killed in real time trading. Knowing yourself is important in trading! I takes time for me (2-6 Months or so ) in order to convice myself. Once again TheRumpledOne: THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU THANK YOU for showing me this nice indicator! Best Regards Andreas
marine2 963 posts msg #35479 - Ignore marine2	3/27/2005 11:24:36 PM The previous comment, "Trading is not about FAITH, it's about SKILL!" is interesting but not true. I would say this, if you don't have faith in your trading skills then you need to refocus your efforts on honing those skills where the faith will come to you and drives you to that success your striving for. To say trading doesn't involve faith (faith = confidence, trust, assurance, sureness, certainty etc) is like saying you can drive your car without a steering wheel. Therefore, trading does require skill, faith, discipline, persistence, a plan, and a postive spirit. Study hard, give it your best effort, and never let a loss get you down but learn from it. If RSI(2) system is your filtering tool of choice, great. But, if you have another filtering tool of choice you're more comfortable with so be it. Find the one best suited to your style of trading and go for it. Never let anyone tell you that one way is the only way. That is narrow thinking which is ridiculous. Happy Investing! Marine2

StockFetcher Forums · Filter Exchange · RSI(2) - The Little Indicator That Could

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