Larry Connors’ R3 Strategy (It Still Works) — Trading Strategies Explained
Today we test Larry Connors‘ R3 strategy and we continue backtesting the trading strategies Larry Connors and his team published in 2009 in a book called High Probability ETF Trading. All the strategies were tested on a basket of 20 liquid ETFs.
We backtest the following trading rules:
The close must be above the 200-day moving average.
The 2-day RSI drops three days in a row and the first day’s drop is from a reading below 60.
The 2-day RSI is today below 10.
If number 1 to 3 is true, then enter at today’s close.
Exit on today’s close if the 2-day RSI is above 70.
The equity curve for the S&P 500 looks like this (SPY, compounded)
You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/larry-connors-r3-strategy/