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November 3, by Rajandran 9 Comments. We consider the Relative Strength Index RSI to be one of the best indicators available. There are a number of books and articles written about RSI, how to use it, and the value it provides in predicting the short-term direction of stock prices. Unfortunately, few, if any, of these claims are backed up by statistical studies.

This is very surprising considering how popular RSI is as an indicator and how many traders rely upon it. Most traders use the period RSI, However, when you shorten the timeframe you start seeing some very impressive results. Most research shows that the most robust and consistent results are obtained by using a 2-period RSI and traders built many successful trading systems that incorporate the 2-period RSI.

How to Trade with The 2-Period RSI – Part 2: Increasing your Returns

The Relative Strength Index RSI was developed by J. Welles Wilder in the 's. It is a very useful and popular momentum oscillator that compares the magnitude of a stock's recent gains to the magnitude of its recent losses. You can change this default setting in most charting packages very easily but if you are unsure how to do this please contact your software vendor.

These numbers represent the benchmark which we use for comparisons. We then quantified overbought and oversold conditions as measured by the 2-period RSI reading being above 90 overbought and below 10 oversold. In other words we looked at all stocks with a 2-period RSI reading above 90, 95, 98 and 99, which we consider overbought; and all stocks with a 2-period RSI reading below 10, 5, 2 and 1, which we consider oversold.

We then compared these results to the benchmarks, here's what we found: When looking at these results, it is important to understand that the performance improved dramatically each step of the way.

The average returns of stocks with a 2-period RSI reading below 2 were much greater than those stocks with a 2-period RSI reading below 5, etc. This means traders should look to build strategies around stocks with a 2-period RSI reading below The average returns of stocks with a 2-period RSI reading above 98 were negative 1-day The average returns of stocks with a 2-period RSI reading above 99 were negative 1-day When looking at these results, it is important to understand that the performance deteriorated dramatically each step of the way.

The average returns of stocks with a 2-period RSI reading above 98 were significantly lower than those stocks with a 2-period RSI reading above 95, etc. This means stocks with a 2-period RSI reading above 90 should be avoided. Aggressive traders may look to build short selling strategies around these stocks.

Also shown is that, on average, stocks with a 2-period RSI above 98 show a negative return over the next week. Check the Live 2- period RSI SCO for NSE Stocks. Data is updated realtime using Y!

You can get the RSI 2 values for any kind o f nse stocks for your analytics or trading purpose by just changing the symbols of Yahoo stocks in [A1, B1, C1……Z1] cells. For Example B1 contains the value IDEA.

NS you would get the values for Reliance Communication.

2 - Period RSI Trading Systems for Nifty

OCT 24 — 4. Important Decisions Before Choosing the Stocks 1 when the stock is trading above day Moving average Bull Market We should look for only Long Signal in RSI 2 for Better Returns. Nifty Options OI Change tracker will […] Now Access MCX — Silver, Crude and Natural Gas Realtime Charts in Metatrader Platform Good news for Commodity traders and investors and those who are starving for finding realtime mcx charts for silver,crude and Natural Gas.

Broco is now providing realtime charts for MCX […] Stockcharts: Now providing EOD and Delayed Intraday Charts for Indian Stock Markets Remember StockCharts? One of the top leaders in web based charting provider in the world is currently offering Indian Stock Charts. Stockcharts is famous for their Free Charting Platform, […] Mini NSE IEOD 1min database for Amibroker Download Mini NSE IEOD 1-min database for Amibroker from 01 Dec upto 7 Jan How to Get NSE EOD Data from Yahoo Finance to Ninjatrader In this tutorial we will be discussing how to get historical NSE EOD data from Yahoo Finance to Ninjatrader.

NinjaTrader is a free charting and back-testing tool. This light weight software utility could be used to update your amibroker software in […] Filed Under: Nifty Technicals , Reliance. Rajandran is a Full time trader and founder of Marketcalls, hugely interested in building timing models, algos , discretionary trading concepts and Trading Sentimental analysis. He now instructs users all over the world, from experienced traders ,professional traders to individual traders.

Rajandran attended college in the Chennai where he earned a BE in Electronics and Communications. Rajandran has a broad understanding of trading softwares like Amibroker, Ninjatrader, Esignal, Metastock, Motivewave, Market Analyst Optuma ,Metatrader,Tradingivew,Python and understands individual needs of traders and investors utilizing a wide range of methodologies.

March 10, at 7: March 18, at June 27, at 1: After taking any position or trade by this concept i. In stead of above if you will adopt 9 or 14 RSI then definitely you will get less chances in day trading but the probability of the correct trade is rather more.

In 2 RSI concept,whatever position you take is before the trend confirmation of the trend or one can say premature trending without confirmation of the trend. T V RAMANA RAO says. October 27, at 1: Sir you have provided http: July 1, at 2: The spreadsheet at http: It uses historical stock quotes automatically downloaded from Yahoo Finance. July 7, at 3: July 11, at The system is more than 4 years old. When it is exposed to public and major people starts following at some point of time the system losses its value.

Its frank 2-period RSI system is outdated. If you are a good trader you need to constantly keep updated of your tradiing system rather sticking to the very old trading system and relying for profits. October 20, at 9: I am trading this system on demo account since last two months. It works nicely in sideway markets. Can you explain how one can trade in trending markets? April 14, at This system I read from book by Mr.

Connors and Alvarez in U. The book can be downloaded freely from net. Your email address will not be published. June 15, By Rajandran 8 Comments. June 6, By Rajandran 5 Comments. May 5, By Rajandran 1 Comment. April 26, By Rajandran 5 Comments. April 9, By Rajandran 2 Comments. October 29, By Rajandran 6 Comments. May 16, By Rajandran 8 Comments. November 14, By Rajandran 5 Comments. November 13, By Rajandran 3 Comments. February 7, By Rajandran 19 Comments. About Contact Us Terms and Conditions Privacy Policy Support Policy Disclaimer.

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A simple formula see below converts the price action into a number between 1 and The most common use of this indicator is to gauge overbought and oversold conditions — put simply, the higher the number the more overbought the stock is, and the lower the number the more oversold the stock is.

You can get the RSI 2 values for any kind o f nse stocks for your analytics or trading purpose by just changing the symbols of Yahoo stocks in [A1, B1, C1……Z1] cells For Example B1 contains the value IDEA. Just Check out the returns of Nifty and Essar Oil and whatever stocks mentioned in that List. Important Decisions Before Choosing the Stocks. So short selling is the only oppurtunity in the current market scenario for better returns.

How to USE this RSI 2 for Any kind of Stocks? Dont Expect anything from it Happy Trading!!!! Related Readings and Observations Nifty Open Interest Change Tracker Here is an another simple OI Change Tracking Chart for you to give a more broader picture to understand what is happening in the Index Option market.

This light weight software utility could be used to update your amibroker software in […].

Comments vishal says March 10, at 7: This will not work ….. Techincal analysis can not provide you an edge on its own. From what you post I am certain you are not a profitable trader long over the long term.

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An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones financial security or lifestyle. Only consider risk capital that should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.

SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. All trades, patterns, charts, systems, etc. All ideas and materials presented herein are for information and educational purposes only. No system or trading methodology has ever been developed that can guarantee profits or prevent losses.

The testimonials and examples used herein are exceptional results which do not apply to average people and are not intended to represent or guarantee that anyone will achieve the same or similar results. Trades placed on the reliance of Trend Methods systems are taken at your own risk for your own account. This is not an offer to buy or sell futures interests.