The problem with the RSI
Hi,
today it will be a good opportunity to talk about a general problem of indicators like the RSI (wether it is the RSI(2) or RSI(28) or RSI(...) doesn´t make a difference...). Let´s look at our trade SNE. SNE lost -0,21%, closing at 37.49$ (close to the 6month low!). SNE lost for more than five days in a row now - and the RSI(2) was below 5 back last week already. Currently it is at 0.25. But what will happen if SNE falls even more? - There is hardly any space left for the RSI to move. So, it is not necesseraly a good buy jsut because the RSI(2) is currently at 0.25. Maybe it will be at 0.10 tomorrow... But, the problem remains - where can the RSI go to? This of course also happens on the top side. If the RSI is at 98.7, where might it go if the stock continues up? Did you catch what I mean? You should be aware of this problem!
Anyhow, back to our trades. SNE was stopped out at 37.35$. Our options therefore lost -11,4% (SNEKG.X, last 3.1$) and -28,6% (SNEKH.X, last 0.5$). That is way too much! Yet, I still believe that SNE is a good candidate - so, I would stick with these options and place the trade again. The same situation for TXN. TXN lost -0,64% - but it did not get stopped out. So, the trade is still on. But, TXNAF.X lost -3,2% (last 3$) and TXNAZ.X lost -5,5% (last 1.7$). I would also be careful here - but still be in the trade.
So, these options had not been my best idea so far. Let´s see how the other stocks performed:
1) MOBE got stopped out aswell, loosing -6,9%
2) CCUR gained 2,94% and I still see it climbing - as I said, give it one or two weeks to develop!
3) HAWK gained 2,51% - possibly going up more
Today I will not comment on any more trades since I am lacking time. However, I am working on a FOREX system that gained more than 40 Pips within 20 hours. But, it is still in work. So, more next time. Good luck to all of you,
The Stockinvestigator
today it will be a good opportunity to talk about a general problem of indicators like the RSI (wether it is the RSI(2) or RSI(28) or RSI(...) doesn´t make a difference...). Let´s look at our trade SNE. SNE lost -0,21%, closing at 37.49$ (close to the 6month low!). SNE lost for more than five days in a row now - and the RSI(2) was below 5 back last week already. Currently it is at 0.25. But what will happen if SNE falls even more? - There is hardly any space left for the RSI to move. So, it is not necesseraly a good buy jsut because the RSI(2) is currently at 0.25. Maybe it will be at 0.10 tomorrow... But, the problem remains - where can the RSI go to? This of course also happens on the top side. If the RSI is at 98.7, where might it go if the stock continues up? Did you catch what I mean? You should be aware of this problem!
Anyhow, back to our trades. SNE was stopped out at 37.35$. Our options therefore lost -11,4% (SNEKG.X, last 3.1$) and -28,6% (SNEKH.X, last 0.5$). That is way too much! Yet, I still believe that SNE is a good candidate - so, I would stick with these options and place the trade again. The same situation for TXN. TXN lost -0,64% - but it did not get stopped out. So, the trade is still on. But, TXNAF.X lost -3,2% (last 3$) and TXNAZ.X lost -5,5% (last 1.7$). I would also be careful here - but still be in the trade.
So, these options had not been my best idea so far. Let´s see how the other stocks performed:
1) MOBE got stopped out aswell, loosing -6,9%
2) CCUR gained 2,94% and I still see it climbing - as I said, give it one or two weeks to develop!
3) HAWK gained 2,51% - possibly going up more
Today I will not comment on any more trades since I am lacking time. However, I am working on a FOREX system that gained more than 40 Pips within 20 hours. But, it is still in work. So, more next time. Good luck to all of you,
The Stockinvestigator
Labels: resume
posted by The Stockinvestigator at 11:44 AM
0 Comments:
Post a Comment
<< Home