RSI Settings That Actually Work
The RSI (Relative Strength Index) is one of the most popular trading indicators, but most traders use it wrong. In this comprehensive guide, you’ll learn the optimal RSI settings for different timeframes and trading styles.
What You’ll Learn
- Optimal RSI settings for scalping, day trading, and swing trading
- How to avoid false signals
- Real examples on EUR/USD and GBP/USD
- Common RSI mistakes that cost traders money
RSI Settings by Timeframe
5-Minute Charts (Scalping)
- RSI Period: 14
- Overbought: 80
- Oversold: 20
1-Hour Charts (Day Trading)
- RSI Period: 14
- Overbought: 70
- Oversold: 30
Daily Charts (Swing Trading)
- RSI Period: 14
- Overbought: 70
- Oversold: 30
Advanced RSI Strategies
RSI Divergence
Look for divergence between price and RSI to spot potential reversals…
RSI Trend Filter
Use RSI above 50 for uptrends, below 50 for downtrends…
Common Mistakes to Avoid
- Using RSI in trending markets - RSI works best in ranging markets
- Ignoring the bigger picture - Always check higher timeframes
- Not using stop losses - RSI signals can fail
Conclusion
Mastering RSI takes practice, but with these settings and strategies, you’ll have a significant edge in the markets.