On September 29th, I responded to the following question about RSI …
I am new in forex the field. I learned that if RSI is above 70 than I should sell, and if it is below 30 than I should buy. Mostly, though, the RSI seem to remain in the 40, 50, 60 range most of the time. What should I do at these points?
I responded at length giving my answer to the reader’s question, which means, I gave my opinion, which I clearly state in the excerpt below.
The first thing I will tell you is that one indicator does not a trade make. If you are relying just on RSI (Relative Strength Index), then you are making a mistake. Generally, indicators work in combination with other indicators to both find and confirm potential trades. Thus, the RSI only has meaningful value when compared with other indicators, if you ask me, and you did.
Certainly, the above is the reason one Andrew Cardwell responded, as RSI to Mr. Cardwell is “so much more than just” one indicator in an array of indicators available to us. I respect that, as we all are entitled to both our opinions and our conclusions. In his response to my opinion, which is below, Mr. Cardwell clearly summarizes his conclusions about RSI. It is also clear that he is serious about relying on RSI as a means to trade successfully.
You may recognize my name and my association with the RSI. I have been working with it for over 30 years. It is so much more than just 70 (overbought) and 30 (oversold). I use “Range Rules” for defining uptrends and downtrends. Overbought and oversold are merely over extensions within the underlying trend and Bull and Bear Divergences are not true reversal signals though many traders view them as such. I have taught traders in my courses how to use RSI for trend analysis, identify trend change and forecast future price targets and objectives.
Although my opinion on the value and use of RSI remains the same after checking out Mr. Cardwell, I will say that he seems to have devoted a large portion of his adult life to studying and teaching how to use RSI. This strongly suggests that he knows a whole lot more about the subject than I do, or most folks do, for that matter.
Now I am not in the business of endorsing, but I do find now and then that suggesting you readers check out this or that might be helpful. In this case, I suggest checking out Andrew Cardwell. Understand, though, when you find his website, his focus is to pitch his courses on utilizing RSI for trading. Although his site does offer some free information (webinar, interview, article), to understand his perspective more deeply, you have to search out articles on the Internet, which I did. Oh yeh, he also offers free-of-charge a standard primer on the fundamentals of trading, which all of us can use from time to time, don’t ya think?
Trade in the day; invest in your life …
