Is the RSI indicator any good?

[Lisa]

I have read numerous counts of articles about RSI. I also did a search on google about this indicator. So far I have received two opinions. Some claim that this indicator is stupid. Others claim a simple strategy using the RSI is highly profitable with the correct money management.

For example, one post I read was watching for a higher low, higher RSI, and a MACD crossover. This is supposed to be a high probability trade.

Any comments or thoughts on this?

[Soultrader]

It really depends on how you use it in combination with your setups. I wouldnt trust the RSI alone. However, I have one setup in which I look for a RSI divergence at a key pivot point. I like seeing price and RSI divergence for confirmation only. This is not a trading signal but just a confirmation of a particular setup I use.

I wouldnt consider the RSI to be a stupid indicator. You just need to apply it correctly in your setups. Also have a entry and exit plan for the particular setup.

[Fxtrader06]

	Quote:	Lisa
	I have read numerous counts of articles about RSI. I also did a search on google about this indicator. So far I have received two opinions. Some claim that this indicator is stupid. Others claim a simple strategy using the RSI is highly profitable with the correct money management. For example, one post I read was watching for a higher low, higher RSI, and a MACD crossover. This is supposed to be a high probability trade. Any comments or thoughts on this?

The only information I look for in the RSI is divergence as well.

[boze]

Any indicator is useless without understanding how to use it. RSI is not a trend following indicator. It is a helpful tool in finding possible tops and bottoms. Remember, use it as a confirmation of your analysis and not as a trading signal. It will save you tons of money.

[strtedat22]

	Quote:	Soultrader
	It really depends on how you use it in combination with your setups. I wouldnt trust the RSI alone. However, I have one setup in which I look for a RSI divergence at a key pivot point. I like seeing price and RSI divergence for confirmation only. This is not a trading signal but just a confirmation of a particular setup I use. I wouldnt consider the RSI to be a stupid indicator. You just need to apply it correctly in your setups. Also have a entry and exit plan for the particular setup.

PERFECT...thats the same way i use it...couldnt of said it any better

[mcichocki_]

Every indicator is good if you have defined an edge with it and execute signals without imparting your emotional wisdom.

That being said, as already mentioned the main purpose most traders use RSI for is divergence at peaks and bottoms or at key levels. I do the same thing on my setups.

Divergence at key levels gives you a high probability trade and if you back it with certain volume traits as another filter your odds are even higher.

Good trading.

[brownsfan019]

Here's a question ... how does a thread that is well over one year old get new life? Normally a spammer would employ this and obviously not the case here, but I also wonder how/why a thread that is so old gets new life again... It's not meant to be a dig at anyone, I'm seriously just curious. I've never understood how that happens on forums.

[mcichocki_]

	Quote:	brownsfan019
	Here's a question ... how does a thread that is well over one year old get new life? Normally a spammer would employ this and obviously not the case here, but I also wonder how/why a thread that is so old gets new life again... It's not meant to be a dig at anyone, I'm seriously just curious. I've never understood how that happens on forums.

WOW...I didn't even notice. Thats a ancient bump.
Now you got me wondering also, I guess someone actually did use the search tool perhaps?

[zdo]

Bumped or not - in general RSI will cause far more trouble than benefit - unless one really knows how (and when!) to use it.
RSI(c,2)...

[Dr Who]

It is like anything, know what they are by studying them and their limitations. There are benefits which has taken me a while to truly understand.