Rocket RSI Settings for Cyclical Reversal Signals
Summary
Rocket RSI is presented as an adjustment to traditional RSI for spotting possible cyclical turning points. The note attributes the indicator to John F. Ehlers and says its lookback should be half the dominant cycle period. It gives a monthly cycle example for daily stock data and recommends keeping the smoothing setting at or below the lookback.
The proposed interpretation is to treat readings below -2 as possible bullish reversals and readings above 2 as possible bearish reversals. The document offers no performance data, chart details, or rules for confirming signals, managing positions, or choosing a cycle length when the dominant period is unclear. These thresholds are therefore presented as indicator guidance rather than validated trading results; the note also does not explain how to test the method across different markets or regimes.
Key ideas
- Rocket RSI is described as an enhancement to traditional RSI for detecting cyclical reversals.
- Set the RSI length to half the estimated dominant cycle period.
- Keep the smoothing parameter no greater than the RSI length.
- Readings below -2 are presented as potential bullish reversal signals.
- Readings above 2 are presented as potential bearish reversal signals.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.