Kev's RSI2 SMA50 Strategy

⭐ Kev’s RSI2 SMA50 Strategy — Institutional Edition (TSX Optimized + RR Filter)

A professional swing-trading system based on Larry Connors’ RSI(2) mean-reversion framework, optimized for TSX equities. Designed for Daily timeframe trading with institutional trend alignment, volatility filtering, and strict risk-reward controls.

📌 Overview

This strategy enhances the classic RSI(2) setup with:
• Strong trend confirmation (SMA50 + Weekly SMA50)
• Deep pullback detection (RSI2 < 3)
• Structural swing-based stop-loss
• Fixed 2R profit target (non-repainting)
• Optional Connors RSI (CRSI) confirmation
• Volatility filtering via ATR range
• Mechanical, deterministic, no-discretion rules

Works best on TSX large & mid-caps, ETFs, and liquid equities.

🔍 Core Philosophy

Buy strong stocks on pullbacks → Price must be above SMA50 + Weekly SMA50.

Pullback must be statistically meaningful → RSI(2) < 3.

R:R must justify the trade → Swing-low SL + 2R target with structural room to hit TP.

🧠 Entry Conditions (Non-Repainting)

• RSI(2) < 3 → Identifies extreme short-term oversold dips.
• SMA50 Filter → Ensures uptrend alignment.
• Weekly HTF Filter (Default = 1W) → Confirms broader trend direction.
• ATR Filter → Rejects volatile bars (range < ATR(14) × 2.2).
• Optional:
– SMA50 Slope (positive trend strength)
– Bullish Reversal Candle
– Connors RSI < 20 (deep pullback confirmation)

🎯 Risk Management

All levels are locked at entry and never repaint.
• Swing-Low SL (last 5 bars)
• 2R Profit Target = Entry + (Risk × 2)
• R:R Feasibility Filter → Only enters if recent swing high is above TP.
• Optional RSI Exit → Exit when RSI2 > 90 (enabled by default).
• Optional SMA Exit (disabled by default) → Conservative early exit.

📈 Visuals

The script plots:
• SMA50
• Weekly SMA50
• Swing-Low SL (fixed)
• 2R TP (fixed)
• Optional SMA exit line

All are non-repainting and update only on confirmed bars.

🔔 Alerts

Buy Signal → All entry filters aligned (RSI2, SMA50, HTF, ATR, RR check).
Exit Signal → 2R hit, SL hit, RSI exit, or SMA exit (if enabled).

🧭 Recommended Usage

• Timeframe: Daily
• HTF: Weekly (default)
• Best For: TSX equities, mid/large-cap stocks, ETFs
• Style: Short-term swing trading (1–10 bars)
• Avoid: Low-volume tickers, microcaps, crypto, biotech, news-driven spikes.

🛑 Notes

• All HTF data uses lookahead_off → non-repainting.
• Rules are fully mechanical and deterministic.
• Position sizing uses % equity by default.
• This script is for educational purposes only and not financial advice.
• Always forward-test before using live capital.