does rsi work / rsi trading strategy / rsi indicator / technical analysis / backtesting
Does RSI Work? I Analyzed 222,010 Trading Backtests
RSI is one of the most popular indicators in retail trading. Across 222,010 real backtests on NexusTrade it ranked 23rd out of the 34 indicator types that appeared in at least 500 backtests, and Bollinger Bands ranked 28th.
Holding market, cadence and era steady, the comparison covers daily equity strategies beginning in 2020 or later. The 83,618 strategies without RSI had a 0.87 median Sharpe ratio, and the 4,017 using it managed 0.51. This is an observational association and not evidence that RSI caused worse results, because users selected their own tickers and rules.
The full ranking of all 93 observed indicator types, including the two that actually lose money, is in the companion article. Only aggregate results for built-in indicators are shown. Creator-owned custom-indicator names, parameters, strategy logic, identifiers, and backtest access remain private.
Transcript
0:00RSI sucks, and I have two hundred and twenty two thousand backtests that prove it.
0:04I ranked ninety three indicator types by median Sharpe. Only thirty four of them showed up in at least five hundred backtests, and RSI came in twenty third of those.
0:13Bollinger Bands did even worse at twenty eighth, and the moving averages landed in the middle.
0:19Then I compared daily equity strategies that started in twenty twenty. The ones without RSI had a median Sharpe of zero point eight seven, and the ones using it managed zero point five one.
0:29That is a correlation and not proof that RSI caused the damage, because users picked their own tickers and rules. RSI still did not beat comparable strategies here.
0:40Send me the word corpus in a direct message and I will share the anonymized results. Leave a comment if you want the indicator that ranked number one.
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