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Using RSI to Gauge Trends

  • #1
  • First Post: Mar 3, 2018 3:40am Mar 3, 2018 3:40am
Do you use rsi to gauge trends?

I found that using rsi, we can catch trends easily.

Attached Image (click to enlarge)
Click to Enlarge Name: rsi trend 1.png Size: 47 KB


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Rsi can be very fast, but using multiple timeframe approach definitely helps.

You can see at the right hand side of the first chart - the trends remain down for the whole time.

The way to do this is

  1. if rsi below 50 - the trend is down.
  2. if rsi above 50 - the trend is up.

The period can be 11 or 13.

What i wanted to know is - is there anybody else using rsi to deternine trend? Any sharing would be appreciated.

  • #2
  • Mar 3, 2018 4:03am Mar 3, 2018 4:03am
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  • #3
  • Mar 3, 2018 4:28am Mar 3, 2018 4:28am
Aud/Cad
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  • #4
  • Mar 3, 2018 5:03am Mar 3, 2018 5:03am
I only look for trend-following trades but I avoid all off-chart indicators like RSI. Reasons are that they don't provide any information I absolutely must have before the trade, and what they tell me I can get from the price chart anyway. The particular trend gauge you have imposed on the RSI - i.e. 50+ is an uptrend, 50- is a downtrend - is artificial: the reality is that most of the time, price isn't trending at all, so a binary up/down measure is bound to lead you into confusion.

I'm not a pure price action trader, I do use EMA's.
  • #5
  • Mar 3, 2018 7:24am Mar 3, 2018 7:24am
Quoting Gigant
Aud/Cad {image}
What i noticed is that you're using rsi waiting for divergence? Is it true?
  • #6
  • Mar 3, 2018 7:32am Mar 3, 2018 7:32am
Quoting tomorton
I only look for trend-following trades but I avoid all off-chart indicators like RSI. Reasons are that they don't provide any information I absolutely must have before the trade, and what they tell me I can get from the price chart anyway. The particular trend gauge you have imposed on the RSI - i.e. 50+ is an uptrend, 50- is a downtrend - is artificial: the reality is that most of the time, price isn't trending at all, so a binary up/down measure is bound to lead you into confusion. I'm not a pure price action trader, I do use EMA's.
Yup. I'm also applying S&R in my charts.

But, using RSI is easy enough. Later i show you some examples to trade using multiple RSIs.

In my opinion, price is trending - it is the way we look at all those timeframes. If h4 ranges, there might be trend in h1. If h1 ranges, there might be trend in m15. and so on. Even in ranging m5, there will be trend in m1. We can't gain (or loss) if all of the tfs ranging...
  • #7
  • Mar 3, 2018 8:03am Mar 3, 2018 8:03am
why would you wait for RSI to touch 50 to go long?
  • #8
  • Mar 3, 2018 8:10am Mar 3, 2018 8:10am
Attached Image (click to enlarge)
Click to Enlarge Name: rsi trend 3.png Size: 49 KB


As promised.
  • #9
  • Mar 3, 2018 8:15am Mar 3, 2018 8:15am
The purpose i brought up this thread is searching for someone that use rsi as trend gauge.

many kind of strategies can be done with rsi.

If you're using rsi + bollinger bands, you can look for m tops/w bottoms. Or maybe a divergence+lower (higher) high that doesn't close outside bollinger bands.

Attached Image


The usage of rsi simply unlimited.
  • #10
  • Mar 3, 2018 11:18am Mar 3, 2018 11:18am
Quoting Ywy
why would you wait for RSI to touch 50 to go long?
What i mean is above 50 the trend is up. Not necessarily go long. We can buy at dips for example..
  • #11
  • Mar 3, 2018 11:29am Mar 3, 2018 11:29am
Directional bias or trend direction is the only thing I use RSI for. I take my long term direction on the alignment of the RSI on two high time frames.

Trade safe and prosper.

KP
Do your homework, follow the footprints of smart money
  • #12
  • Mar 3, 2018 3:47pm Mar 3, 2018 3:47pm
Quoting KeenPips
Directional bias or trend direction is the only thing I use RSI for. I take my long term direction on the alignment of the RSI on two high time frames. Trade safe and prosper. KP
If that's the case, can you describe it a little bit longer on how you're using it? And what about success/failure you realized using it?
  • #13
  • Mar 3, 2018 3:56pm Mar 3, 2018 3:56pm
As a swing trader, I don't want to go against a direction where the RSI on both the weekly and monthly time frames are aligned.

Trade safe and prosper.

KP

Quoting redwed
{quote} If that's the case, can you describe it a little bit longer on how you're using it? And what about success/failure you realized using it?
Do your homework, follow the footprints of smart money
  • #14
  • Mar 3, 2018 5:17pm Mar 3, 2018 5:17pm
What period do you use for rsi?

weekly and monthly time frames are aligned - does this means that both of them above 50 for long bias/below 50 for short? I'd been thinking of the same actually. If we rely heavily on 1 tf, the rsi tends to whipsaw and played around 50 area. If we rely on 1tf and the next higher tf, it produce better result.

Quoting KeenPips
As a swing trader, I don't want to go against a direction where the RSI on both the weekly and monthly time frames are aligned. Trade safe and prosper. KP {quote}
  • #15
  • Mar 3, 2018 6:43pm Mar 3, 2018 6:43pm
Quoting redwed
The purpose i brought up this thread is searching for someone that use rsi as trend gauge.
I am generally reluctant to take a trade if the higher timeframes are not in my direction, and like to see the 1Min timeframe turn in the direction of the trade. This shows them all in one look.
https://www.forexfactory.com/showthr...4#post10609214
  • #16
  • Mar 4, 2018 12:06am Mar 4, 2018 12:06am
The setting may be the standard 14 period but I use 21. Really it doesn't matter but I think it should not be too short. I look for slope.

KP



Quoting redwed
What period do you use for rsi? weekly and monthly time frames are aligned - does this means that both of them above 50 for long bias/below 50 for short? I'd been thinking of the same actually. If we rely heavily on 1 tf, the rsi tends to whipsaw and played around 50 area. If we rely on 1tf and the next higher tf, it produce better result. {quote}
Do your homework, follow the footprints of smart money
  • #17
  • Mar 4, 2018 1:51am Mar 4, 2018 1:51am
Quoting redwed
Do you use rsi to gauge trends? I found that using rsi, we can catch trends easily. {image} {image} Rsi can be very fast, but using multiple timeframe approach definitely helps. You can see at the right hand side of the first chart - the trends remain down for the whole time. The way to do this is if rsi below 50 - the trend is down. if rsi above 50 - the trend is up. The period can be 11 or 13. What i wanted to know is - is there anybody else using rsi to deternine trend? Any sharing would be appreciated.

RSI ... my favourite momentum indicator.

Here is something which may be helpful as added information.

Attached File(s)
File Type: pdf Trend Determination_RSI_John_Hayden (1).pdf   560 KB | 1,481 downloads


And the download link for John Hayden book " RSI:The Complete Guide" [click to download]
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett
  • #18
  • Mar 4, 2018 3:03am Mar 4, 2018 3:03am
Quoting redwed
{quote} What i mean is above 50 the trend is up. Not necessarily go long. We can buy at dips for example..
Yes that's what I wanted to say. And from this statement it seems that we shouldn't care about what trend it indicates. Because if the price hits a suport line and bounces back in a down trend or a correction for example and RSI indcates low values that means you won't buy?
  • #19
  • Mar 4, 2018 3:59am Mar 4, 2018 3:59am
The use of the RSI -
Try setting it's period to 3, ie RSI(3)
I think you will find its pretty good at detecting price/indicator divergence in trends
  • #20
  • Mar 4, 2018 8:59am Mar 4, 2018 8:59am
I use RSI with length adjusted to the time frame of the chart and OB/OS levels always of 60/40. See attached UJ 5 minute chart with a RSI length of 24 representing (24 x 5 min) two hours of bars. Bullish readings should stay above 40 and bearish below 60. Starting from the left on Thursday price is bullish up to top of chart, other than a one bar dip below OS 40 level around 700am EST. Then around 100pm EST it strongly drops below 40 and stays there more than 24 hours, other than again a one bar push up thru OB 60 level, until late Friday afternoon 320pm EST into the week's close.
Attached Image (click to enlarge)
Click to Enlarge Name: UJ RSI.png Size: 55 KB
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