RSI (Relative Strength Index) is one of the most useful momentum indicators and I know most traders use it for Intraday trading. If you making a profit through the help of the RSI indicator, that’s good. But what’s wrong if you can learn something special trading secret about RSI?
I used RSI as beginners did, but when I experiment on RSI and analyze results, again and again, I found the highest possibility of RSI indicator in day trading.
Best RSI Setting For Intraday Trading
Here I’m going to discuss,
- How beginners use RSI
- What I learn from my experiment, and
- The best RSI setting for day trading.
Classic RSI Setup
This is How Beginners Use RSI Indicator: Most of the beginners learn the use of indicators from YouTube videos. Am I right? Also, I was one of them..
YouTube and any other free platforms told you RSI setup like this.
- Period = 14
- OverBought = 70
- OverSold = 30
and take a trade with the help of 70 and 30 reference lines, like this.
Modified RSI Setup
This is How I Use RSI Indicator For Day Trading: My capital affected some times due to following the RSI setting described above ( StopLoss Hit ). But I never leave RSI, because it’s the best momentum indicator according to my opinion which can give me accurate analysis every time. So I work on the RSI, experiment on it, and finally found the best setting for the RSI indicator which is working for me 99% profitable.
I’m not a lover of the default setting of the RSI indicator, so I setup RSI like this for day trading which gives me the best result for options trading also.
- Period = 7
- OverBought = 60
- OverSold = 40
and I trade on this way,
- Buy position when RSI touch 60 going upside from the down.
- Sell position when RSI touch 40 coming down from the top.
- Do nothing when RSI range bound bound between 40 to 60 lines. Because, according to my rules this is sideways market.
This RSI setting give me the instant profit, not taking huge time to achieve the target in Intraday and option trading.