I looked at a few stock charts and found that stocks usually go up after a low RSI (< 20). What's wrong with a very simple strategy that uses that to trade with a 1-2% trailing stop?
Trend vs nontrend. When it's a trending day, it can stays at/below 30 for awhile. If you can distinguish between the two, then it's not a bad play. Many traders watch it so there is always a momentary lift when it gets to a very low RSI. It's not the holy grail but it can be reliable. And as you said, simple. I use it to get a good entry point.
Why don't you test it? Here's an idea for a starting point.... Identify your entry point then measure the MAE and MFE....then see if you can get a 1:3 risk to benefit...if you cant then come in the backdoor and ask yourself what enty point would I need? Choose instruments that illustrate a history of reacting to the RSI...slim you universe down to a basket that you watch...The size of your basket is up to you..There may be software that can help you find RSI sensitive stocks...can't remember...but you can configure a scan for the universe... Send me 10% of your profits... Add some sort of a trend quality filter and then send me 20% of your profits... Michael B. Disclaimer I do not trade equities and please no PM's. I have no idea if RSI works and do not use indicators in my trading...I just wanted to encourage the poster to test and make it his own.
Electric? Should I notify Bill Gates to suspend his plans to remove himself from the daily operations of MicroSoft in two years? Wifey
By the way...wouldn't also noting the general market direction in several timeframes be 70% of the success of this strategy?