Larry Connors: Short-Term Trading Strategies
Connors showed that short-term pullbacks in long-term uptrends tend to be bought, and built simple tested rules around it.
Trade a real day like Larry Connors
A real market day with the date hidden. Run the checklist on the chart, then buy, sell or stay out: the real candles answer.
Check every point of the list before you decide. Stay out if the setup is not there.
Who they were
Larry Connors is an American trader and researcher who founded TradingMarkets and Connors Research. He wrote "Street Smarts" (1995) with Linda Raschke.
With Cesar Alvarez he wrote "Short Term Trading Strategies That Work" (2008), which introduced popular rules such as RSI(2) and Double 7s.
Principles and rules
1. Buy pullbacks, not breakouts
In stock indices, short-term weakness above the 200-day average has historically been bought.
2. Trend filter
Only buy above the 200-day moving average.
3. Simple, testable rules
Every rule should be precise enough to be tested on historical data.
4. Exits matter
Mechanical exits, such as a close above a short average, keep results consistent.
Key lessons
- Mean reversion and trend following can work together.
- Test before you trust.
- Fewer parameters mean less overfitting.
Strategies from this method
How to practise it
The Double 7s and RSI 2 strategy pages have the rules. In Candlemind practise them on US 500 daily charts.
Frequently asked questions
What is the RSI(2) strategy?
Buying when the 2-period RSI is very low while price is above the 200-day average, and selling on strength.
Do Connors' strategies work in forex?
They were designed for stock indices; currencies lack the same long-term upward drift.
Summaries and paraphrases of public books and interviews, for education. Not investment advice.