RSI(2) strategy explainedIntermediate

Larry Connors' short-term pullback rule for index markets.

The idea

In a long-term uptrend, short sharp dips tend to bounce. A 2-period RSI is very sensitive, so a reading under 10 marks an extreme short-term dip.

The rules

Price above the 200-day SMA.
Buy when RSI(2) drops below
Exit when RSI(2) rises above
A wide stop, for example 3 ATR, protects against crashes.

Variations traders use

Buying in parts as RSI falls further, using RSI below 5, or exiting when price closes above the 5-day moving average.

What testing shows

On stock index markets this rule has a long, well-documented history of working, though with fewer trades and occasional sharp losses. On forex and commodities it is much weaker.

What it looks like on a real chart

Picked automatically from the backtest on real data: the latest winner and the latest loser. The numbered circles are the steps of the rules, in order. Losers are part of every strategy.

Winner +0.35RES · 1D · 2026-11-02 · Long

Loser -1RES · 1D · 2026-03-04 · Long

How WickCheck tests it

Buy when RSI(2) crosses below 10 and price is above the 200 SMA. Exit when RSI(2) crosses above 70. Stop at 3x ATR.

Test it on real data

Open these rules in WickCheck, change any word and run them in seconds. No code.

Run this test

Full results on 5 markets: RSI(2) strategy explained.

Try it on your own strategy

Write your rules in plain words and test them on real data in seconds.

Open WickCheck

Popular strategies explained

ICT Silver Bullet strategy explainedThe one-hour ICT setup: what it is, the rules, common variations and what testing shows.The ICT 2022 model explainedSweep, market structure shift with displacement, fair value gap entry: the most taught ICT entry model.New York open liquidity sweep strategyTrading the first hours of New York after a sweep of any untaken high or low.London open Asian range strategyUsing the Asian range as liquidity for the London session.Order block strategy explainedTrading returns to the last opposite candle before a strong move.Turtle soup strategy explainedFading failed breakouts of obvious highs and lows.Turtle trading and the 20-day breakoutThe classic trend-following rule set, simplified.Moving average crossover strategiesGolden cross, EMA crosses and why filters matter.Bollinger band mean reversionBuying closes below the lower band and exiting at the middle.Power of 3 (AMD) as a trading planAccumulation, manipulation, distribution: using the idea without guessing.

Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.