Relative Strength Index, will it be always right?

Hi all!
im just trying the RSI, is it always true?
i mean when it got above 50, says 61, is it always profit (some pips above transaction)if we set buy?

or in the other side if the RSI 40 is it always good for setting sell?

thanks for attention

Is the Pope Canadian?

thanks for the reply
but i still dont have clear solution
im a very newbie...

LOL, there is only one truth in any market. "The Market Is Always Right"

Everything else is a lie.

the RSI is "usually" accurate, in that once it passes 40 on the way up, it will go up, and the same for down, BUT the RSI is a better RESEARCH tool than a TRADING tool.

FAR better is the stochastics and/or the CCI

depending on how you trade, one may be better than the other for your uses, but you should DEMO both until you see for sure -- in fact, compare all three on your charts, because indicators are very subjective at times, and you will see different things in different indicators !

enjoy and trade well

mp

thanks for all the responses!
i will try to use the stochastics

nothing in Forex Market call ALWAYS TRUE for that reason you see are here !!..

as smjones say the only one is true IS THE MARKET.

Indicator? It's a device that runs. Look at it run (put up a chart during the week and watch the indicator react to the market), read its instructions (investopedia.com, mlq4.com, babypips.com and others), look at its insides (MT4: MetaEditor), try it for a while (demo-trade with it). And if you trade with it for real, its value immediately depreciates (win some, lose some) .

Hi KingIndian,

Like most indicators they are like Certified Public Accountants or history teachers. They both tell you what happened in the past and do not foretell the future. But nothing ever will, so do not expect this to be your find of the century that takes you to the promise land. My observations and subsequent analyst of this and many indicators are very extensive. Due to my love of all things physical, mystical and mathematical that can be taken apart to reveal the inner workings of the beast. A teacher I am not for I have not the patience nor the skills. I can only tell you what works for me. I like the Bollinger Bands, Momentum and Stochastics but never do I use just one by itself and only after confirmation and I trade only with the trend. "The trend is your friend" the most important indicator of all. Have patience and wait for the best moment to trade. Trade smart and prosper. JBS

The past is the past and the future is before you. Make a plan for your success before the future becomes the past.

This is the complete answer you need. Not only does RSI not work on its own, but if you rely on it 100% of the time you will be open to huge risk. There is no such thing as an indicator which is always right.

man u are incredible and i think someone needs to spell it out to u...

everything and nothing works 100% of the time
RSI may work at times and other times kill u...

will work mostly in consolidating markets with other signals....if things where mostly working then most people would be rich...i am surprised this thought u never thought about this

this thread is funny

I second that.

I would personally recommend trying out the MFI indicator (Money Flow Index). Ive done lots of comparison on different TF's and the MFI seems to give a much smoother picture of the market.

Cheers

RSI and Stochastics are oscillating indicators, meaning they work best in ranging markets. When a market is in a trend, these indicators can show being overbought/oversold for a long time. In other words, these indicators don't work in trending markets.

So do they work all the time? No, because markets are never ranging all the time. Markets also trend.

The tricky part is determining whether a market is ranging or trending. If you figure that out, let me know!

RSI (Relative Strength Index) developed by Welles Wilders its a momentum oscillator.

measures speed and change of price movement

RSI= 100- (100/1+RS)
RS= is 2 smoothing calculation of average gain vs average loss over a period of 14 days
the second calculation of RS is a smoothing technique

basically is a mathematical calculation of gains and losses in an attempt to see overbought and oversold conditions.

the problem with this is there are no such thing as overbought or oversold, the market is too complex to be predicted, so mathematical formulas CAN help a trader as a TOOL but should NEVER be the signal to enter a trade.

not even candle sticks, nor bars, nor point and figure, lines they are all TOOLS.

entering a trade should be done using all these tools and your BRAIN.

so to answer your question IT CAN WORK but DOES NOT WORK ALL THE TIME.

it all depends on your strategy and your ability to read the market structure, market form, direction, momentum, investor sentiment, dollar strenght, interest rates, broad economic views, policies, etc......

all your tools, all your information, using your brain to come to a reasonable decision, once in the trade continue to analyse if you can ride, you need to have a contingency plan, money management strategy, and have the ballz to carry out your plan and dont let emotions come in the way of objective market analysis.