RSI: How to Set Up And Use in Trading

[coolmind]

The relative strength index or the RSI is a momentum oscillator used to measure the velocity and magnitude of directional price movements. The indicator provides the investors with sell or buy signals when the asset is overbought or oversold respectively.

The RSI changes from 0 to 100% and can be presented by a single fluctuating line. The closer this line gets to the zero mark the higher are the chances that the asset is oversold. The price, in this case, can be expected to go up. When the RSI gets close to 100%, the asset is likely to be overbought. According to the indicator, the asset price will, therefore, fall soon.

As noted above, the RSI oscillates between 0 and 100%. Traditionally the RSI is considered overbought when above 70% and oversold when below 30%. If the indicator provides a lot of false alarms it is possible to increase the overbought threshold to 80 and decrease the oversold threshold to 20.

 

[Real_Freedom]

Too simple to be true ... although sometimes we complicate more of the account, I still think it should be complemented with others

 

[Pipnick]

I have to agree with Real Freedom, trading the RSI as suggested is at best 50/50 chance of success. Its real value in my trading is in spotting the good divergences.

 

[CarlCJ123]

I trade RSI with MACD. I use 80% and 20% levels for overbought and oversold.

 

[Nerkhor]

I alwasy try to make sure the trade will be ok, so i use lvls 75/25

 

[fbala]

Too simple to be true ... although sometimes we complicate more of the account, I still think it should be complemented with others

I agree. Maybe with MACD or moving averages.

 

[tonairo]

The relative strength index or the RSI is a momentum oscillator used to measure the velocity and magnitude of directional price movements. The indicator provides the investors with sell or buy signals when the asset is overbought or oversold respectively.

The RSI changes from 0 to 100% and can be presented by a single fluctuating line. The closer this line gets to the zero mark the higher are the chances that the asset is oversold. The price, in this case, can be expected to go up. When the RSI gets close to 100%, the asset is likely to be overbought. According to the indicator, the asset price will, therefore, fall soon.

As noted above, the RSI oscillates between 0 and 100%. Traditionally the RSI is considered overbought when above 70% and oversold when below 30%. If the indicator provides a lot of false alarms it is possible to increase the overbought threshold to 80 and decrease the oversold threshold to 20.

View attachment 4555

this could best be used with bollinger band and pivot point since its more of a reversal indicator. is there anyone here who can customize this system, also involving the fibo?