Wednesday, April 3, 2013

GDX RS2 2 indicator is very oversold

A while back I posted an oversold RSI 2 system for GDX, the system last did a long trade back in February for a quick trade. Currently the RSI 2 is at 1.6% and if it closes below 2.1%, the system will take a long trade.  Therefore monitor the RSI 2 and see how it closes, again it needs to close below 2.1% in order for this system to take a long.  

Here's the performance report and statistics

click here for the full system report, it will open in Internet Explorer

I've also attached a static image if the general statistics. 

Note: This is NOT a traditional RSI 2 Larry Connors system because those systems will only take longs when price is above the 200 MA.  I turned off that MA so that I could what would happen if you ignored it.  As you can see from the stats, it's a rare event, about 95% of the traders were winners with the largest losing trade only being 0.75%.  HOWEVER that is deceiving because the system can take quite a bit of heat at times if it buys too early before GDX finally bounces.  Here's a video I made back in February which shows this.

GDX RSI 2 system where trades are only taken when price is above the 200
day MA - this only occurred 10 times over the last 6 years since GDX
has been trading, none of he trades were losing trades - clearly we
don't have this setup since GDX is well below the 200 MA

Tradestation Reports:

GDX RSI 2 and price above 200 day MA - no losing trades

GDX RSI 2 - price can be above or below 200 MA

Again I'm posting this for informational purposes only.  

My students who have the Tradestation Systems - already have this system and others on their computer

As always this is not a recommendation to buy or sell - this is for
informational purposes only, you make your own trading decisions.

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