Tuesday, December 16, 2008

Fed Studies and RSI(2)

Tuesday could see some sharp moves thanks to the Fed. I’d encourage readers to review some of the Fed studies I’ve posted previously. One thing to keep in mind is that strong reactions to the Fed can often be faded over the next few days.

I got Larry Connors new book, “Short Term Trading Strategies That Work” in the mail yesterday and have read most of it. While a good portion of it has been covered by him before either in other books or on the TradingMarkets site, there are a few new ideas in there. If I can take one idea from a trading book and easily test or apply it to my own trading then I consider it worthwhile reading. This book has more than one.

There was a chapter on the RSI(2) that was quite interesting. I was pleased to see his findings were similar to Michael Stokes recent findings as well as Damian Roskil’s. Others who have published useful information on RSI(2) include Woodshedder, BHH at IBDindex, and Dogwood.


sysin3 said...

bzbtrader at http://bzbtrader.blogspot.com has also done some RSI(2) stuff.

I believe he thinks it works especially well on IWM.

David said...

Could 2 period RSI be used to produce better dollar cost averaging returns in a 401k?

Instead of doing 401K contributions on 15th and 30th of every month,
what do you think of having the contributions go into a money market account, and waiting for the next RSI<30 to move into mutual funds.