# This is an interpretation of Larry Connors RSI 2 strategy. The system 0

Posted on 14, February 2014

in Category SID

### Description for RSI_2 SID 418

This is an interpretation of Larry Connors RSI 2 strategy. The system uses a simple RSI indicator working on a period of 2 days along side a 200 day EMA… Notes for this Trading Account:

This is an interpretation of Larry Connors RSI 2 strategy. The system uses a simple RSI indicator working on a period of 2 days along side a 200 day EMA. Connors original strategy involved buying when the RSI value dropped below 10 as this was considered as heavily oversold and selling when the RSI value is above 90 as this was considered as heavily overbought. In our example these boundaries are slightly different.

System breakdown:

– Goes long when the RSI value is below 20 and the closing price is above the 200 period EMA,

– Goes short when the RSI value is above 95 and the closing price is below the 200 period EMA.

– Runs on a 1 hour timeframe.

– \$10000 : 50000 units. It is recommended to keep the same ratio increase/decrease the units in relation to your account size. The units can be changed within the variables section under the “Fixed” object. Rules for this Trading Account: Notes for this Trading System: Rules for this Trading System: Bar event logic:

```my \$rsi = Now(RSI(2)); #RSI indicator with a period of 2.
my \$ema = Now(EMA(Close,200)); #EMA indicator with a period of 200.

#If there are no open positions for the current symbol...
if(NoPosition){
#...place a long position when the RSI value is below the lower bounds and the closing price is above the EMA 200.
#The lower bounds variable is set under, RSI_2 -> Variables. This is currently set to 20.
#...place a short position when the RSI value is above the upper bounds and the closing price is below the EMA 200.
#The upper bounds variable is set under, RSI_2 -> Variables. This is currently set to 95.
SellOpen if \$rsi>\$upperBounds && ClosePrice<\$ema;

#If there are existing positions for the current symbol...
}else{
#...close long position when the RSI value is above the upper bounds.
PlaceSellOpen('RSI_Close_Long') if(\$rsi>\$upperBounds && LongPosition);
#...close short position when the RSI value is below the lower bounds. OrderFill event logic:
```my \$stoploss;