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UCS Larry Conner's RSI 2 Strategy

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This is an indicator, Designed to give Buy and Short alert per Larry Conners RSi 2 Strategy.

Chris Moody has done a better job with this Strategy - There are lot more insights, % Winning, Amount of Money this generated in average . Follow the Link -
Larry Connors RSI-2 Trading System!!! Surprising Win Rate!!!
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// Created by UCSgears based on Larry Conner's RSI 2 Strategy on 8/31/2014

study(title="UCS_Larry Conner's RSI 2 Strategy", shorttitle="UCS_LC_RSI-2")
// inputs
source = close
rsilength = input(2, minval=1, title="RSI Length")
os = input (10, minval = 1, title = "oversold")
ob = input (90, minval = 1, title = "overbought")
malength1 = input(50, minval=1, title="SMA1 Length")
malength2 = input(200, minval=1, title="SMA2 Length")
HVlength = input(100, minval=1, title="HV Length")
ADXlength = input(10, minval=1, title="ADX Length")
lensig = input(14, title="ADX Smoothing", minval=1, maxval=50)
vmalength = input(21, minval=1, title="Volume SMA Length")
//Calculation
//RSI_2 
up = rma(max(change(source), 0), rsilength)
down = rma(-min(change(source), 0), rsilength)
rsi = down == 0 ? 100 : up == 0 ? 0 : 100 - (100 / (1 + up / down))
plot(rsi, color=purple)
band1 = hline(ob)
band0 = hline(os)
fill(band1, band0, color=purple, transp=90)
//Moving Average
SMA200 = sma(source, malength2)
SMA50 = sma(source, malength1)
//Historical Volatility
annual = 365
per = isintraday or isdaily and interval == 1 ? 1 : 7
hv = 100 * stdev(log(close / close[1]), HVlength) * sqrt(annual / per)
//Volume Condition
VSMA21 = sma(volume, vmalength)
//ADX
adxup = change(high)
adxdown = -change(low)
trur = rma(tr, ADXlength)
plus = fixnan(100 * rma(adxup > adxdown and adxup > 0 ? adxup : 0, ADXlength) / trur)
minus = fixnan(100 * rma(adxdown > adxup and adxdown > 0 ? adxdown : 0, ADXlength) / trur)
sum = plus + minus 
adx = 100 * rma(abs(plus - minus) / (sum == 0 ? 1 : sum), lensig)

//Definition
//Stock Qualification
sq = (adx > 30 and hv > 30 and VSMA21 > 250000) ? 1 : 0
//Buy Qualification
buy = (SMA50 > SMA200 and rsi < os) ? 1 : 0
//Sell Qualification
sell = (SMA50 < SMA200 and rsi > ob) ? 1 : 0
//Plot
plotchar(sell, title="i", char='S', location=location.top, color=red, transp=0, offset=0)
plotchar(buy, title="i", char='B', location=location.bottom, color=green, transp=0, offset=0)
//Added in BackGround High-lighting
noTrade = buy == 0 and sell == 0
bgcolor(noTrade ? white : na, transp=50)
bgcolor(sell ? red : na, transp=60)
bgcolor(buy ? green : na, transp=60)
moveon
2 years ago
Buy, Buy, Buy, Buy, Buy, Buy ;-)

I think his strategy can't be used without a comparison with other indicators:

snapshot
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ucsgears PRO moveon
2 years ago
Well, Its just a code mimicking "Larry Conner's" Strategy. Remember, this is an indicator. You have to filter signals. This would not "NEVER" work 100% as is. To get an momentum based indicator / strategy to work 100%. You have to understand the math behind, and modify. Back TEST yourself and feel comfortable.

You can get this for free - http://stockcharts.com/school/doku.php?id=chart_school:trading_strategies:rsi2

I have used a extensively modified version of this. Back in the first quarter of 2014, Its way too intense, Two Time Frames combined for signals. And added in many filters. Mostly used it only on Strong Trending Stocks. Not something that moves sideways like this. Was really profitable, with my scan.

I still use this in a way to trade Pullbacks, but its totally modified, doesn't even have any of the above mentioned parameters in my scan codes.

Btw, Chris Moody has done a better version of this. He also has a tons of comments you can learn to trade this, Ignore THIS.
Larry Connors RSI-2 Trading System!!! Surprising Win Rate!!!


snapshot


This generates enough false signals. I Agree, its the traders responsibility to trade responsibly. I have my edge ignoring a false signal. You need to find yours.
+1 Reply
moveon ucsgears
2 years ago
Thanks again for your helpful answer. I've tested Chris Moody's version before and when I came across the one you created I just had to comment on how noisy this indicator in general can be if you don't apply filters like you did.
Reply
ucsgears PRO moveon
2 years ago
Thanks for posting the Feedback. This helps others. Well. Most indicators codes available here are some sort of paid indicators. We apply our own tweeks to it. So we don't get bitten by any law suits. There are tons of way you can trade a system. I code, just because i love math.

For example. Difference between LB Squeeze and my Squeeze (not published) Little different, but I prefer looking at less smoother version
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Difference between TVI published vs what I look at. Trust me, People can spend closer to a grand for this same information in a fancy package.
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The Custom ATR - Keltner channel can be closer to 600 bucks, with a fancy pdf, showing you settings.
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Worst of all, Momentum Histogram / Momentogram with settings can be 500 bucks.

Trust me, I don't buy them. I code them and figure out a closer version, using mostly free tools.
+1 Reply
moveon ucsgears
2 years ago
Thank you for sharing all this indicator work with us! This weekend I came around testing the "Larry Conner's" Strategy again. I discovered that there is also a "Connors RSI (CRSI)" indicator which is similar, but different to the classic RSI.

Tradingview is offering the CRSI indicator *, but you can't see the Pinescript code which this indicator uses and therefore I can't build any advanced custom alerts with it. Could you create a CRSI indicator for the Tradingview community with your 'our own tweaks to it. So that you don't get bitten by any law suits'? :)

Here is some code:

Source: http://info.tradingmarkets.com/ConnorsRSI-Code.html
Amibroker: http://www.amibroker.com/library/detail.php?id=1418
Metastock: http://forum.esignal.com/showthread.php?38676-Connors-RSI
Wealth-Lab: http://www2.wealth-lab.com/WL5Wiki/ConnorsRSI.ashx

* https://www.tradingview.com/stock-charts-support/index.php/Connors_RSI_%28CRSI%29
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