Would this be a good trading strategy?

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Subject Author Date Would this be a good trading strategy? DarkProtoman 10-23-2006  Re: Would this be a good trading strategy? ynotssor 10-23-2006  Re: Would this be a good trading strategy? DarkProtoman 10-24-2006
Posted by DarkProtoman on October 23, 2006, 11:25 pm Would this be a good trading strategy? Buy X shares of stock when RSI is <= 20 Sell the stock, and short shares more when RSI is >= 80 Buy the stock and cover the short when RSI is <=80 Sell the total number of shares you bought (2X shares) in the above when RSI is >=80 Rinse and repeat. Criticism please. Thanks!!!!! Posted by ynotssor on October 23, 2006, 11:49 pm > Would this be a good trading strategy? > > Buy X shares of stock when RSI is <= 20 > Sell the stock, and short shares more when RSI is >= 80 > Buy the stock and cover the short when RSI is <=80 > Sell the total number of shares you bought (2X shares) in the above > when RSI is >=80 > Rinse and repeat. > > Criticism please. Thanks!!!!! In what time frame? So after the initial long position, the "swing trade" oscillates about RSI ~80? Or is that a typo that you meant to state: > Buy the stock and cover the short when RSI is <=20 One should read about the RSI before considering such a counterproductive use of it in complete absence of other corroborating indicators or divergences within itself wrt price. One such treatise can be found at http://www.chartfilter.com/reports/c39.htm Be advised that such overly-simplistic trading methodologies such as the proposal stated are a recipe for disaster. A company going bankrupt can display the RSI characteristics you cite above and result in *every* trade being a losing one. Posted by DarkProtoman on October 24, 2006, 3:34 am ynotssor wrote: > > > Would this be a good trading strategy? > > > > Buy X shares of stock when RSI is <= 20 > > Sell the stock, and short shares more when RSI is >= 80 > > Buy the stock and cover the short when RSI is <=80 > > Sell the total number of shares you bought (2X shares) in the above > > when RSI is >=80 > > Rinse and repeat. > > > > Criticism please. Thanks!!!!! > > In what time frame? So after the initial long position, the "swing trade" > oscillates about RSI ~80? Or is that a typo that you meant to state: > > > Buy the stock and cover the short when RSI is <=20 > > One should read about the RSI before considering such a counterproductive > use of it in complete absence of other corroborating indicators or > divergences within itself wrt price. One such treatise can be found at > http://www.chartfilter.com/reports/c39.htm > > Be advised that such overly-simplistic trading methodologies such as the > proposal stated are a recipe for disaster. A company going bankrupt can > display the RSI characteristics you cite above and result in *every* trade > being a losing one. That was a typo. I suggest using it for blue chips or established companies. Like IBM, MSFT, or GOOG. Similar Threads Posted Is this a good trading strategy? July 10, 2007, 5:49 pm Good Free Trading Blogs December 1, 2006, 11:59 pm A Few Good Investment And Trading Resources Are Available Here... July 12, 2008, 6:41 am Found a very good trading quote blog September 16, 2006, 10:45 am Share few good free Trading Blogs February 2, 2007, 7:38 am New Trading Strategy November 16, 2006, 2:35 pm my trading strategy July 14, 2007, 8:20 pm Automated Forex Trading Strategy September 21, 2005, 1:37 pm Option Strategy Analyzer & Strategy Screener (www.goog-finance.com) January 25, 2007, 10:43 am Simple Forex Trading Strategy That Is Fully Automated November 20, 2007, 5:03 am