This strategy was featured in the May 2010 issue of Active Trader magazine.

System Concept:
This system tries to jump on temporary corrections and ride the resumption of the trend by exploiting the RSI's trait of remaining in overbought or oversold territory during strong trends - i.e., the tendency to produce prolonged overbought/oversold readings. Brief exits from these conditions signal buying and selling opportunities.

Strategy rules:

1. Buy the next day at the market when the 2-day RSI crosses below 30 (the oversold level) after having spent 8 days or more above 70 (the overbought level).
2. Sell at the market the next day on the opposite signal (an RSI cross above 70).
3. Short the next day at the market when the 2-day RSI crosses above 70 after having spent 8 days or more below 30.
4. Cover short at the market the next day on the opposite signal (an RSI cross below 30).

System submitted by Antonio Domiciano.