Hi everyone. Please i know alot might have been said on this topic already and i appreciate that. i just want to know a few more things like: what’s the best timeframe to use rsi on? whats the best known settings for this timeframe? what other indicator or method can be used to confirm rsi signals? Thanks! Please reply.
I know it’s not what you want to hear, but trading just doesn’t work that way. Indicators are simply tools, and will not give you “signals.”
There’s no such thing as the “best timeframe” or “best settings” for any indicator. The TF and settings are based on what you’re doing with it.
If your looking for a good indicator-based system to start with I’d recommend the Cowabunga system. It uses RSI as well as a few other indicators. You can learn more about it in the Blog section of Babypips under “Pip My System.”
Thanks phil. Am there and it looks to be a long read. It might be worth it though so am on it. thanks for the intel and please people, keep those ideas, advice and tips coming. thanks.
standard/default RSI is usually at 14 periods. As for confirming the trend and what not, there’s lots of different indicators and charting techniques for that.
Cowabunga uses macd crosses to confirm trend along with Stochs.
PSAR can be used, so can S/R levels, ect.
There’s so many different tools. Kinda falls onto you as to which one you’d rather use.
Ok virt. Lets just keep to the rsi eh. so how exactly does this periods value change? Default-14 and cowabanga-9 why the difference?
Hi phil, i finished going through the cowabanga system and it doesnt state the reason for setting the rsi at 9. could it be because of the timeframe it uses-M15? big thanks for directing me there. the intel i got ll help fine tune my sys.
the period is just the way its calculated. The higher the period, the less volatility you’ll see in the RSI indicator. If you try out several different rsi settings, say 5, 10, 15, 20, 25, you’ll notice that the higher you go up the smoother and slower it gets.
This helps in that when rsi moves you’re more sure that the moves are legit. However, because of the higher period you also enter later too.
There’s plus’s and minus’s to using both. RSI 9 is probably very good for 15min, whereas I use 14 on 4h. But again, I used 14 on 15min charts too. So its all down to preference and how you trade.
And I was keeping to RSI. You asked about other indicators to confirm…I suggested what to use to confirm.
You might want to go through the Babypips school a couple of times because many answers are located there. Otherwise you should also test out some of the systems in the holy grail section. That might un-complicate things also once you see how others have constructed a system.
Ok. Am clear on the periods now. Next is: which is better- buying when rsi is above 50 or buying when it is around 30. And vice versa for selling? thanks.