Quick Answer: What Is The Best RSI Setting For Day Trading?

How is RSI used in day trading?

You can mark up support and resistance zones before the start of a trading session.

Then, set up alerts for RSI overbought/oversold signals.

When your alerts sound off, take a closer look to assess the quality of the trading setups.

If you still prefer a more sensitive indicator, try the 2-period RSI..

What is the best time frame for RSI?

between 2 to 6The best timeframe for RSI lies between 2 to 6. While the default 14 periods are fine for many situations, intermediate and advanced traders can decrease or increase the RSI timeframe slightly depending on whether the position they are entering is long-term or short-term.

What is a good RSI to buy?

Traditional interpretation and usage of the RSI dictates that values of 70 or above suggest that a security is becoming overbought or overvalued and may be primed for a trend reversal or corrective price pullback. An RSI reading of 30 or below indicates an oversold or undervalued condition.

When should I buy RSI?

A trader might sell when the RSI crosses below the overbought line (70). Varying the time period of the Relative Strength Index might increase or decrease the number of buy and sell signals. In the chart below of Gold, two RSI time periods are shown, 14-day (default) and 5-day.

What time frame is best for MACD?

The MACD Triple strategy bases itself on the moving average convergence divergence indicator (MACD – 12,26,9). The MACD is analyzed in three time frames: 4 hours, 1 hour and 15 minutes. Notice that the ratio of each time frame to the next is 4:1. The 1-hour and 4-hour MACDs serve as trend filters.

What is RSI strategy?

The relative strength index (RSI) is most commonly used to indicate temporarily overbought or oversold conditions in a market. An intraday forex trading strategy can be devised to take advantage of indications from the RSI that a market is overextended and therefore likely to retrace.

Which is the best indicator for day trading?

Best Intraday IndicatorsMoving Averages. Moving averages is a frequently used intraday trading indicators. … Bollinger Bands. Bollinger bands indicate the volatility in the market. … Relative Strength Index (RSI) Relative Strength Index (RSI) is a momentum indicator. … Commodity Channel Index. … Stochastic Oscillator.

What is the best MACD setting for day trading?

When we apply 5,13,1 instead of the standard 12,26,9 settings, we can achieve a visual representation of the MACD patterns. These patterns could be applied to various trading strategies and systems, as an additional filter for taking trade entries. It is argued that, the best MACD setting for a MACD pattern is 5,13,1.

Which is better MACD or RSI?

RSI Gives Less Frequent, But More Accurate Trade Signals On this measure, this study found RSI to emerge out as a better indicator than MACD. At its core, this finding stemmed from the fact that, in this study, over a specified period of time, the RSI Indicator gave fewer but more accurate trading signals than MACD.

Does RSI really work?

Well known but rarely tested, technical tools like the relative strength index can be profitable if used properly. … At the other extreme, near zero, RSI is oversold. Any oscillator, including RSI, works best during trading ranges, when a clear trend cannot be easily identified.

Is RSI a good indicator?

Best Indicators to Use With RSI. The relative strength index (RSI) is a technical momentum indicator that compares recent price gains against recent price losses. … That means it is beneficial to get confirmation from another trade signal before acting on RSI.

How do you avoid RSI false signals?

The false signals of an RSI.Avoid RSI false signal when the trend doesn’t reverse.The price sideways after the entrance signal.Use a smoothed version of the indicator to avoid RSI false signals.