diff --git a/strategies/2-period-rsi-highs-and-lows/README.md b/strategies/2-period-rsi-highs-and-lows/README.md index 561958f..4c57236 100644 --- a/strategies/2-period-rsi-highs-and-lows/README.md +++ b/strategies/2-period-rsi-highs-and-lows/README.md @@ -4,4 +4,22 @@ The idea for these strategies comes from chapter 11 of [*How Markets Really Work As with most of the strategies from this book, they are meant to illustrate certain characteristics of the market rather than be traded directly. +## Rules + +### 2-Period RSI Highs + +1. The asset (e.g., SPY) must be above its 200-day moving average. +2. If the 2-period RSI closes above 85 (95 in the book), enter a long trade. +3. Exit the trade after 5 trading days (~1 week). + +### 2-Period RSI Lows + +1. The asset (e.g., SPY) must be above its 200-day moving average. +2. If the 2-period RSI closes below 15 (5 in the book), enter a long trade. +3. Exit the trade after 5 trading days (~1 week). + +The 2-period RSI entry thresholds differ from the book as they led to improved backtest results. + +I also wanted to avoid overlap with the [2-Period RSI strategy](https://moshferatu.dev/moshferatu/ninjatrader/src/branch/main/strategies/2-period-rsi) from [Short Term Trading Strategies That Work](https://moshferatu.dev/moshferatu/short-term-trading-strategies-that-work). + --- \ No newline at end of file