Using RSI?

Using RSI?
Using RSI in conjunction with stoch, MACD, and moving averages...
...on a short is it better if the RSI indicator is in the overbought region (>70%) or is it better that it shows a down trend, ie is moving downwards through 50%?

This assumes all other indicators are showing a possible short.

I think you have to be more specific here. What do you mean by showing a short? Being overbought does not mean you should necesarily short. In itself, it doesn't seem that either is good or necessarily better.

It seems to me that RSI and Stochastics should be interpreted in different ways depending on whether it is trending up, trending down, or range bound. IN a down trend for example, it may not reach >70 for quite some time.

Calinor said:

I think you have to be more specific here. What do you mean by showing a short? Being overbought does not mean you should necesarily short. In itself, it doesn't seem that either is good or necessarily better.

It seems to me that RSI and Stochastic shoudl be interpreted in different ways depending on whether it is trending up, trending down, or range bound.

Click to expand...

Well, I have a method that looks at EMA, SAR, RSI, Stoch, and MACD.
When the MACD crosses and is heading down, I check the other indicators. If RSI is overbought, SAR says sell, and Stoch is overbought then that indicates a strong sell/short to me. Opposite for the other way. Some paeople wait until the RSI is actually trending, ie it is moving downwards through 50%.