Connors RSI-2: Trend-Filtered Pullbacks with Short-Term Exits
Summary
This note describes a short-term reversal strategy attributed to Larry Connors. For a long entry, price must be above its 200-period simple moving average and the two-period RSI must fall below 5; the position exits when price rises above its five-period average. The short rules invert the trend and RSI thresholds: price below the 200-period average, RSI above 95, and an exit when price falls below the five-period average. Position size is configurable, and a stop loss may be added.
The author says the strategy was designed for 30-minute charts across indices, forex, and raw materials, but reports that their tests were unprofitable most of the time. They note that some parameter values appeared profitable on higher timeframes and cite a daily Germany 30 CFD example with a stated spread and point value, without supplying enough results here to assess it. No stop loss was used in the original rules; the note leaves risk controls to the user.
Key ideas
- Long entries require price above the 200-period average and two-period RSI below 5.
- Long positions exit when price closes above the five-period average; short rules invert these conditions.
- Position size can be configured, and the author says a stop loss can be added.
- The author reports that tests were usually unprofitable, with some higher-timeframe settings appearing profitable.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.