“How I trade with only the 2-period RSI”

“How I trade with only the 2-period RSI”


How I trade with only the 2-period RSI — with David Moadel hey everybody welcome to looking at the
markets with David Modell Happy Thanksgiving I’ll tell you what I’m
thankful for I’m thankful to you guys and gals who have been clicking on my
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content that you guys and gals enjoy so thanks a lot all right so I found this
I’m always looking for different articles and unusual strategies and I
like to bring them to you guys and gals and I just had to click on this title
because it’s it’s unusual how I trade with only the two period RSI I was like
wow only the two period RSI okay all right and I’ll put a link in the
description below this video to this article and you might agree with it you
might disagree with it so I want to get your comments you know what do you think
of this one but that that’s a really click where the title huh all right
just the two period RSI by itself is a really interesting choice I mean that’s
the one that that goes up down up down up down you know it moves so so fast I
mean the standard default setting for the RSI is usually 14 period right for
most platforms and they choose that because it’s not too fast not too slow
it gives you you know buy and sell signals but not too many not too few
it’s it’s kind of just right really or a lot of people think so at least the two
period is is kind of extreme right but okay that’s what this says and I’m
curious and I want to bring it to you so how I trade with only the two period our
site let’s see what you think first there is this interesting quote here see
if you agree with this one even though we do not suggest using only one
indicator if one had to the two period RSI would be the indicator that’s a
really interesting quote I don’t know if I would agree with that I mean the two
that’s yeah that seems kind of extreme but okay all right
that’s how they feel I guess so all right let’s let’s look at the strategy
let’s see if you agree that it’s good or not good I’m just gonna focus on the
long setup for now again if you want to read the whole thing just click on the
link below in the description below this video you know I I’m not being paid to
do this this is just something I’ll bring it to you alright so the long set
up all right here’s how they’re claiming to do this you wait until the two period
RSI falls below five which sounds like an extremely low reading but remember
it’s remember it’s the two period RSI so it it’s gonna go below five sometimes
probably it’s it swings pretty wildly and they have a picture here to go with
it in the article here so yeah here’s the five going up down up down very
frequently and here’s the example alright so here it is the RSI two period
going below five barely but it did alright and so that’s the first thing
you wait for you don’t do anything yet you’re just watching okay and when that
happens you want to take note of the most recent high point all right
the the swing high as they call it alright so you know make a note of the
most recent high point on the chart and then draw a line okay draw a horizontal
line into the future here alright for reference cuz you’re gonna use that
again all right so okay wait until it goes below five and then make note of
the most recent high point including the wicks of the candles alright so and draw
that line alright so what’s next now you wait until the price breaks above the
higher swing high that formed just before the RSI signal confirmation of
bull train in other words alright so after after this now you wait until the
candles Pierce above the most recent high point basically I think is what
they’re saying that’s my interpretation so it did hear the wick of this candle
here broke above that recent swing high the high point of it okay so it did it
don’t do anything yet you’re still just watching alright and then you wait until
the RSI to period goes below five again for a second time after it breaks above
that recent hi there all right and there it
is – period RSI drops below 5 again and you still don’t do anything yet now you
wait for a bullish move all right you buy on the break of the high of a
bullish bar that’s kind of a vague phrase there I don’t know the break of
the high of a bullish bar does that mean a big green candle or a big gap up not
sure exactly what that means here’s how I would probably play this I’m gonna put
my own spin on this or or my own interpretation or alteration of it I
would probably wait until it breaks up clearly candle breaks above that same
line that that same previous high you know which it seems to have done here at
least with the wick more clearly more clearly here with this candle I mean
that’s a definite confirmation of a bull trend for sure interestingly in the
article there they’ve got an arrow pointing to this bar so I guess maybe
they would have bought on this bar again hard to say I’ll let you read the
article for yourself if you want to links in the description below this
video if they bought here I don’t know if this is confirmation of a bull trend
after four red candles I’m kind of skeptical of that but then there was a
big gap up and then it broke above that line and just kept on going so obviously
it worked in this example I would not count on this working 100% of the time
but it’s an interesting idea if it were me I would wait until probably this
candle I would wait until it broke above this line here because this line was
resistance you know the candles you know it hit their head once fell down hit its
head again twice fell down and then BOOM above it clearly clear break above it
closes above it and so as technicians like to say the line that was resistance
now becomes support after it breaks clearly above it
right and so now it’s a support level and it just kept going so that’s how I
would play it but they they drew an arrow to this candle and again I’ll read
the description to you by on break of the high of a bullish bar I’ll let you
interpret that how you will and I’m curious what you guys and gals think of
this strategy if you’re if you’re able to back test it go for it
more information is always a good thing I do not recommend using any strategy
until you forward test it as I like to call it meaning demo trade it for a
while and then find out whether it’s really working for you and even then if
you’re going to use it commit only very small amounts of capital to it at a time
just to make sure that you’re seeing staying safe respect your stop losses
all the safety precautions should be in place with any any strategy this one or
any other one that I ever discuss ever okay so what do you think of this one
interesting okay yeah it is only using the RSI to period I
mean so you think using other stuff to not other indicators but you know kind
of a support and resistance line kind of sort of thing is in there so it’s using
the price action as well so it’s not as simple as just the RSI to period there
are other factors in play here I think I could be wrong so there you go anyway I
hope you enjoyed that for Thanksgiving there’s your Thanksgiving gift I guess
if you choose to use it alright let me know in the comments below you know what
do you think of this one is it is it good you like it do not like it I’m kind
of neutral on it but it is interesting as an idea to test out and thank you
again this is you know on Thanksgiving you’re supposed to say what you’re
thankful for I’m thankful first of all for getting 40,000 subscribers that’s
fantastic thanks a lot everybody and thanks for again I’m gonna put out a
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great holiday don’t eat too much stay safe I’ll talk to you again soon