No Country for Bad Trades: The RSI Setup

In this episode, Kyle sits down with Cam to break down another piece of his trading system: the RSI strategy.

Unlike Gap and Go, which is built around momentum and breakouts, this setup is a mean-reversion strategy. The idea is simple: find strong stocks that are temporarily oversold, then look for the bounce.

Cam walks through how he uses a two-period RSI, why he looks for signals below 10, and how he exits once RSI recovers. He also explains why this works better on large-cap, institutionally supported names (especially Nasdaq 100 stocks) and why it falls apart when applied to smaller, lower-quality names.

The conversation also covers how RSI fits into a broader portfolio of strategies alongside Gap and Go, Close/Open, and Opening Range Break. Cam explains why diversifying by strategy can create a smoother equity curve, keep capital working in different market conditions, and reduce reliance on any single setup.

They also get into the practical side: how to size the trade, why earnings create the biggest tail risk, whether stop losses help or hurt, how options can be used to define risk, what delta and expiration ranges make sense, and why selling puts may be another way to express the same idea.

This episode is a deeper look at building a full trading system... Not just finding one setup but stacking strategies that complement each other.

Chapter Timestamps:

• 00:00 — Why Diversifying Strategies Matters
• 00:49 — RSI Strategy Overview and Where the Signal Comes From
• 03:22 — Close/Open, Overnight Returns, and Unused Capital
• 05:17 — Applying RSI to Individual Stocks
• 06:30 — Entry and Exit Rules for the RSI Setup
• 07:35 — Why RSI Works Better on Large-Cap Names
• 09:27 — Filters: Nasdaq 100, 200-Day Strength, and Moving Averages
• 10:40 — Strategy Diversification: Gap and Go, Close/Open, and RSI
• 13:19 — Choosing Between RSI and Gap and Go
• 15:24 — Managing Risk Without Traditional Stop Losses
• 18:31 — Coca-Cola Example: RSI Signal, Options, and Rolling Winners
• 20:10 — Using Options to Define Risk
• 24:06 — Volatility, IV Crush, and Selling Puts
• 27:12 — Backtesting, Survivorship Bias, and AI
• 29:15 — Sizing Correctly, Avoiding Earnings, and Final Rules

Sponsors:

Our podcast is sponsored by Sue Maki at Fairway Independent Mortgage (MLS# 206048). Licensed in 38 states, if you need anything mortgage-related, reach out to her at SMaki@fairwaymc.com or give her a call at (520) 977-7904. Tell her 2 Bulls sent you to get the best rates available!

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Cam:‍ ‍

Cam is a Navy veteran & management consultant turned 8 figure investor & trader. Trading let him retire at 35 & be able to support and provide for his family forever. Now he wants to help others escape the financial system and live the way we were meant to live: free. His system is a rule-based design that can be used for long term investing, swing trading or option selling on any schedule.

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