RSI indicator strategy
Buy if the RSI indicates the stock is oversold. Close the position when the RSI indicates the stock is overbought.
Read more on the RSI and the strategy on the Wikipedia website.
|Investment symbol||Symbol of the stock to be bought|
|RSI period||Period for RSI indicator calculation.
The most commonly used value is 14 days.
|RSI oversold threshold||RSI values below this threshold indicate the stock is oversold and trigger the buy trade.
The most commonly used value is 30.
|RSI overbought threshold||RSI values above this threshold indicate the stock is overbought and trigger the sell trade
The most commonly used value is 70.
Buy Facebook (FB) when the standard RSI(14,30,70) indicates the stock is oversold. Close the position when the stock is overbought. Invest for the period of 3 years.
Simulation on a single period
Note: We quote the results for just the most recent 3-year period from 2016-02-25 to 2019-02-24. Review the simulation for other periods.
|Annualized return||11.12%||Compound annual return (CAGR) over the period|
|Max drawdown||0.00%||Maximum loss relative to the initial value experienced over the period|
Note: We simulate over all 3-year periods since Facebook's IPO in 2012.
|Percentile 20% of annual return||11.02%||80% of the periods produced this annualized return (CAGR) or better|
|Percentile 20% of max drawdown||-1.80%||80% of the periods experienced this max draw-down (relative to the initial investment) or better|