RSI Trend-Following and Momentum Strategies By Arthur Hill
Salepage : Arthur Hill – RSI Trend-Following and Momentum Strategies
Product Description
RSI is widely used as a momentum oscillator to identify overbought and oversold levels. A dive into the formula, however, reveals that RSI is quite well equipped for trend-following strategies. It can even be used to rank ETFs and stocks to find those with the strongest momentum.
The strategy basically buys when the 5-day SMA of 65-day RSI crosses above 51. We will call this “Smoothed RSI65”. The green line in the indicator window is Smoothed RSI65. Note that RSI(65) is invisible. Smoothed RSI65 moved above 51 in mid April for a bullish trend signal. A bear signal would trigger with a move below 49.
There are plenty of profitable examples over the last few months, but how did this strategy perform over the last twenty years? Well, I tested this strategy and will be adding some articles and videos to TrendInvestorPro.com in the coming weeks. In the meantime, I presented this strategy to the CMT Association on July 29th and the recording is available to TrendInvestorPro subscribers. The presentation starts with an overview of RSI and then examines the main driver for RSI values. I then build out a trend-following strategy and backtest this strategy using stocks in the S&P 500.
What is forex trading?
Forex, or foreign exchange, can be explained as a network of buyers and sellers, who transfer currency between each other at an agreed price. It is the means by which individuals, companies and central banks convert one currency into another – if you have ever travelled abroad, then it is likely you have made a forex transaction.
While a lot of foreign exchange is done for practical purposes, the vast majority of currency conversion is undertaken with the aim of earning a profit. The amount of currency converted every day can make price movements of some currencies extremely volatile. It is this volatility that can make forex so attractive to traders: bringing about a greater chance of high profits, while also increasing the risk.
RSI Trend-Following and Momentum Strategies By Arthur Hill
