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One trade turns into another

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2:54 pm
June 21, 2010


Jared Yucht

What if you begin an rsi trade as a 30 rsi on the 5 day and bouncing off the cloud and the next day the 2 day rsi goes below 5.  Do you stick with the first intended strategy?, initiate a completely separate trade?, or get out when either strategy sale first occurs?

3:39 pm
June 21, 2010


Larry Holmes

As far as the first question is concerned, my current thinking is if I begin the trade on a 5-day or a 2-day I wouldn't add to it when the other one gave a signal on the second day. However, other than doubling exposure in the same security, I don't see anything wrong with it.

As for the second question, if I get in on a 5-day signal I would get out on a 5-day signal. Same with the 2-day. Also, if the 2-day and 5-day give a buy signal on the same day I treat it as a 2-day buy signal and would, therefore, get out on a 2-day sell signal.

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