How to use RSI

[mlegha1]

A nice article regarding how to use RSI...
http://www.tradingmarkets.com/.site/stocks/commentary/editorial/2-Period-RSI.cfm

[Luc1Grunt]

ahhhh...good ole RSI(2). I'm willing to bet almost ALL bottom feeder stocks listed on this forum have an RSI(2) below 2.

Deadly indicator if you know and understand a few additional indicators, support/resistance, and price/volume.

Don't use it all by itself....youll eat some stocks without a doubt.

Deadly with support/resistance/pivot points!

[TheChartGuru]

I have read about the RSI(2) in Stockfetcher.com. There are mix opinions of how dependalbe it really is. I have looked at many stocks to see the "magic" of RSI(2), sometimes the stock went up and sometimes the stocks went down. Look at DSTI. It had an RSI(2) of .208 on 12/14/06, but it continued to go down. The it had another RSI(2) at .420 a couple of days ago and it shot up 50%+. However, the Slow Stochastics, and MACD were dragging too. What made it go up? The low RSI(2), the oversold MACD, and SS or was it the fact that the last 6 red candles were getting smaller signaling a reversal signal soon? I looked at CAMH. IT went up 7.4% on Friday. The RSI(2) was at .363 the previous day. What made it bounce, the low RSI(2), the oversold MACD, Slow Stochastics, the volume spike the previous day or the long tail hammer the previous day? Look at BKHM that I alerted a couple of days ago. It had a low RSI(2) but it is still going lower. What will make it bounce soon, a low RSI(2), an oversold MACD, Slow Stochastic, an increase in volume or that it is getting near its support price of $3.12(currently $3.35)?
I would advice caution when using just ONE indicator.

I personally like to use the RSI(10). It is a little faster then the RSI(14) and not as choppy as an RSI(2). I also like to see a reversal signal on an oversold stock, especially with oversold MACD and SS(5,3).

The Guru has spoken

[Luc1Grunt]

exactly!

[madcowdisease]

I have read about the RSI(2) in Stockfetcher.com. There are mix opinions of how dependalbe it really is. I have looked at many stocks to see the "magic" of RSI(2), sometimes the stock went up and sometimes the stocks went down. Look at DSTI. It had an RSI(2) of .208 on 12/14/06, but it continued to go down. The it had another RSI(2) at .420 a couple of days ago and it shot up 50%+. However, the Slow Stochastics, and MACD were dragging too. What made it go up? The low RSI(2), the oversold MACD, and SS or was it the fact that the last 6 red candles were getting smaller signaling a reversal signal soon? I looked at CAMH. IT went up 7.4% on Friday. The RSI(2) was at .363 the previous day. What made it bounce, the low RSI(2), the oversold MACD, Slow Stochastics, the volume spike the previous day or the long tail hammer the previous day? Look at BKHM that I alerted a couple of days ago. It had a low RSI(2) but it is still going lower. What will make it bounce soon, a low RSI(2), an oversold MACD, Slow Stochastic, an increase in volume or that it is getting near its support price of $3.12(currently $3.35)?
I would advice caution when using just ONE indicator.

I personally like to use the RSI(10). It is a little faster then the RSI(14) and not as choppy as an RSI(2). I also like to see a reversal signal on an oversold stock, especially with oversold MACD and SS(5,3).

The Guru has spoken


Wow.