K.I.S.S. - RSI Swing Trading

T

The Grim One

New member
Hello All,

Brand new here, so I'll jump right in. Found this forum looking for some info on how to create a custom scan.

My trading idea is simple. There are stocks that have fairly set patterns of "oversold" RSI that, after a generally consistent period of time wander into "overbought".

The time frame I'm talking about is measured roughly in weeks.

FB, and MU are a couple of examples.

I'd be interested in finding as many stocks as I can that fit this pattern. Because well... it doesn't work 100% of the time so eggs in many baskets, and stocks that fit this pattern are not going to do it forever. Thus a scan.

Does anyone have anything like this?

My coding experience is limited to having written a simple function calculator (+, -, /, *) in C# back in 2006.
 
BenTen

BenTen

Administrative
Staff
VIP
What exactly are you scanning for? Stocks that are overbought / oversold?
 
P

poststreet

Member
VIP
grim arent you talking about data mining, perhaps you might explore "seasonality", try stockcharts , seasonality by months.
also try utube seasonality, you know you can chart seasonality on TOS , for instance 10 years via weekly. click "style" , click "chart mode" , then click "seasonality',there you can look at monthly patterns over ten years.
 
T

The Grim One

New member
What exactly are you scanning for? Stocks that are overbought / oversold?

Roughly, but not as simple as a basic RSI scan. Let's say a stock is currently overbought, and in about 2 weeks it'll drift down to oversold... and in roughly 2 more weeks it drifts back up. Some stocks can be found that have a fairly long historical pattern like this. At least long enough for me to consider them opportunities for a little patient arbitrage. Of course, it goes without saying that risk management demands that I spread out over several stocks. The nature of the play demands that I look for eventual replacement stocks.

Thank you for the reply.

grim arent you talking about data mining, perhaps you might explore "seasonality", try stockcharts , seasonality by months.
also try utube seasonality, you know you can chart seasonality on TOS , for instance 10 years via weekly. click "style" , click "chart mode" , then click "seasonality',there you can look at monthly patterns over ten years.

I'm looking that over, and I'm not seeing that TOS seasonality mode allows for studies to be applied. I'll keep digging, maybe it's there somewhere. YouTube seasonality videos are interesting so far. I see scanners being used. The variables and overall mentality of what those scanners are looking for don't line up with what I'm looking. I'll keep at it.

https://usethinkscript.com/threads/watchlist-showing-the-rsi-values.2754/
I found this thread by you. So I'll go into a bit more detail as to what I'm doing and why. Maybe you, or someone else will be interested.

The meme crowd tells me that as long as I preface something with "Unpopular Opinion", it'll signal that I'm not looking for a fight, or to upset folks. If that works about as well as leading with "All due respect"... I'll apologize in advance.

My trade philosophy is simple: Don't feed the trolls. In this instance the trolls are institutional traders. The pros.

Don't feed them? Let me explain.

A lot of effort is being put into figuring out how to spot an uptrend early so we can buy into before it really runs. This is dumb. (That's the unpopular opinion.) Buy on upswings and selling into downswings is the exact opposite of what the trolls do. They already have positions they're more than happy to sell you at a premium on hype, and buy back from you on doom/gloom. All day, every day and every time a stock crests and dips above and below the OB/OS bars on RSI.

If you'd like to see this in action... I don't need to point to a specific stock, on a specific day. Grab a chart on any stock with strong institutional ownership, pick any day. Look on the chart where RSI crosses above OB and shows a little "daylight" between the line and bar (~75). Look at the first green bar that pushes the RSI up over the bar. On an "average" run up (no real news/reason for the play) the very next bar will be red. And it'll be just enough volume to push the RSI back down to just under the bar. On a slightly bit more hype, the next bar will be a doji, or close. And on the bigger runs it'll be a much smaller green bar. Same holds true inversely on downtrends.

Check as many charts as you like on stocks that have strong institutional ownership and you'll see the same thing. It's automated, and that's how the big boys scalp. And... it's very efficient. It doesn't leave very many crumbs on the table. Especially if you are feeding them.

They rely on us for liquidity. They sell us stocks at a premium as we buy on upswings, and buy stocks from us at a discount as we dump shares in panic. I don't want to help/feed them.

So that's where I'm coming from. Because I don't have the buying power to hold positions in multiple stocks across multiple sectors... I can't trade exactly like them. But it can be emulated/approximated.

Therein lies what I'm looking for. An efficient way to identify stocks that have a steady history of trending between OB/OS with a roughly 2-3 week period between trend peaks. Specifically using RSI.

If the above "clicked" with anyone... then likely you too are motivated to find it. If you have a better idea please... do share.
 
T

The Grim One

New member
I have a way of expressing the criteria:

During a 45 day period, RSI must have peaked above ~73 and below ~27 each at least once. But no more than say, twice each.
This pattern must hold true for a period of ~180 days.

View the results with a MK1 Eyeball, and adjust variables as required to fine tune said results.

Trade methodology is to buy resulting stocks at OS and hold for 2-3 weeks to sell at OB.
 

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