Topic: Does the RSI change based on future events? (Read 208 times)

14 is a default parameter. You can customize it to any parameter you want. Ridiculously, most of traders use that default parameter for their indicators and trades.

You can somewhat if you choose good indicators for your chart or you can combine some indicators as your filter. It is a problem of trading taste. Someone rely on slow indicators, some others have interests in fast indicators. Some want to trade with long period, 1-hr, 1-day candle but some only want to trade with short period, 3-min, 5-min, 15-min candles.

RSI is based on the 14 past days.

Nobody can predict the future, even less a technical indicators, as all built out of past data.

It is a statement of conventional finance, Efficient Market Hypothesis (EMH):
"Past events doesn't predict future price"

Trend is a friend and indicators as RSI is a indicator for a very long and transparent trend. It is only helpful after a strong trend as bearish or bullish is confirmed. It delays confirmation on trend to about 14 days (the default parameter for RSI) and for a strong and long term trend, 14 days are not a matter.

For unclear price movements, not a trend, RSI plays as a trap. For traders who have more interests in short and fast events, RSI is useless.

well if we r going into this resolution then i would like to add that the values of the RSI are not "one size fits all"  and they should be configured according to the market they are used in depends on volume, candlestick time-frame, currency .

there are several common combinations of RSI such as StochRSI ( Stochastic ) and OBVRSI where you get more data  read of the volume with  more parameters combined with Moving Average added, K and D Slow and Fast where
Fast stochastic calculation
        %K = (Current Close - Lowest Low)/
        (Highest High - Lowest Low) * 100
       
         %D = X.period SMA of %K

   Slow stochastic calculation
        %K = %D of fast stochastic
        %D = X.period SMA of %K
where K can be 14 ( some kind of default for last 14 period )  and D can b 3 (some kind of default for last 3 period )

since the basic RSI is not enough to make a decision ,  these parameters can show the trend changes in the basic RSI and give a more clear picture about if the market is going up or down.

important note !
1. keep in mind that these calculations are based on historical data and CAN NOT PREDICT in any way the market.
2. you can only make assumptions. but remember,  "assumption is mother of all fuck-ups"   
3. as @palle11 stated, "RSI is good if combined with some other indicators "

About the timing of RSI, the longer time frame is the best to follow because it is difficult to be broken down and going past that can mean a strong direction has been changed. RSI is good if combined with some other indicators and many traders make the use of it.

RSI and other similar indicators are reading and analyzing the history of candlestick  data (Open,Close, Volume and some more..... ) in different time periods user requests 1Min 30Min 1Hour 1Day and more..
if the default set is 14 and time period is 1Min then its the last 14 minutes. if it's 1Day than the last 14 days

I think the RSI (which meaning is Relative Strength Index changes). Changes here is on the market direct. Remember is about the strength of the market to know where the price is, so the RSI walk or shows the trader where the direction is. So to this IMO, it changes. It helps you know pricing but the RSIgoes after the price stakes. No doubt one of the most used indicators and it helps to build your knowledge on what is happening and if price has stayed long in a direction, indicating overbought and over sold to you for a choice to stay on or go out from the market.

Since BTC is volatile, A group of whale/exchange inside job can easily manipulate the price and used indicators against most of the traders that doing future/leverage trading. There are many times before that an exchange manipulates the price of bitcoin by buying and selling huge volume of Bitcoin in contrary to the position of whales.

RSI indicator is giving an accurate data since its just base on the price history. There is a manipulation going on that's why its not reliable to use it on crypto for trading guide.

I think a lot of people use RSI in the extremes but only to support other TAs. For example, if you have a buying signal elsewhere, then you want to confirm with low RSI, and conversely high RSI to confirm a sell signal.

I do think however if you are medium and short term, selling at high RSI should eventually give you gains, but your stop has to be very very far away esp during bullrun I think:)

It's being used in the Forex market which is like leverage trading still so it must work the same way in crypto.

Works almost the same as the Momentum oscillator. RSI somehow can be used as to what the market will be in the future like if you use it on the weekly chart. You'll know the price will eventually go up when the price dip below the band 30 of RSI.

Hello jackg!
You already had few answers so hopefully you have some idea so far. In addition I would like to say that there are four types of indicators:

1. Trend indicators
2. Momentum indicators
3. Volume indicators
4. Volatility indicators

In one line, RSI is a Momentum indicator.

With the past movement of the price you can have some idea of the strength of the next move but you will not get it 100% correct and even will not find any clue unless you combine any other indicators in a meaningful way.

In my opinion, RSI is the most powerful indicator but also the most misunderstood indicator. It should not be used to decide the direction, but to identify what mode we're in.

For example, I can see that the RSI is above 90, which is very high since the highest is 100. 50% of the times I see that, I will short and 50% I will go long. Because you NEED to look at other things as well and you also need some skill. Only looking at indicators is not enough.

We cannot predict what will happen to the price of a certain asset by just looking in its RSI but we can have an idea on where the price may go, RSI is a momentum indicator wherein you can use in order to know the support and resistance, the current trend of the asset that you are monitoring and to know if a certain asset is already overbought or oversold area. Actually, I can trade cryptocurrencies with RSI and chart only, I already mastered how to use RSI. There are reversal patterns out there and continuation pattern that can help us to have an idea on where the price may go. It cannot really tell the future events but it is just a indicator that giving us convictions. 

RSI is an indicator for past price movements. In the other words, it is a delay indicator and it does not help to make decision if you are trader who need to have more show real time movements and can be used for decisions and orders in short time frames.

RSI is same as MA and some many indicators have default parameter at 14 (candles). Depends on candle is used, it can be 14 candles of 15-min, 30-min, 1-hour, 1-day.

Like someone already said, it's based on data of the past 14 days. Using this indicator gets quite tricky when the momentum of the market changes right after a some period of sideways movement otherwise it's a very good indicator when one want to determine whether the asset is in overbought or oversold conditions and trend reversals.
Fibonacci Retracements, resistance and support regions are most often used to predict the future events

RSI is indeed one of the easiest indicators to read for traders, even for new traders,
in my opinion the RSI will not change in the future, even though there is an event,
the requirement to read the RSI is not only for one time frame, but you have to compare it with many time frames.

RSI is one of the indicators that ive been using since when im still in forex and now here on crypto i do make use of this because you can somewhat spot out if the market is bias neither on bull or in bear.

You can identify out if a certain trend is on exhaustion or in the verge of possible rise up but overall i do make use of it with other indicators such as S&R, trend lines and basic MA's.

For candles then basic up reading on how they do behave then i do say that they dont work most of the time and we know that this market is always unpredictable.

It can break out technical analysis in an instant thats why we should always set plan B's and C's if the initial analysis had failed out.

No, actually not. The RSI is based on the 14 (by default, this can be changed) candles before only. So look at the RSI more like compressed version of the chart. Same data, but in a different format. The RSI is very useful for trading and by far one of the most popular indicators. However, it does not tell anything about the future movement. It does only tell you the current state of the chart.

I hope that helps.

As in the relative strength index. I thought it did but I'm not sure now.

There seem to be enough people. Trying to use it for trading - do we just assume where the indicator currently is is about where it should rest in the future. It might also be that it doesn't normally get represented by candles etc so the points can still move until the close of the price on that time frame.