What is the best way to utilize the Relative Strength Index?
RSI is an improvement on Rate of Change and Stochastics indicators because it removes the take away effect of early data. Because it is a ratio, it eliminates the problem of needing large amounts of historical data, but because a ratio is being used in its calculation, it is more volatile and erratic. Shorter RSI periods result in a large number of whipsaws. Longer RSI periods result in more reliable signals but they not as profitable as other indicators. Indicators can depict support and resistance, momentum, trend, etc. but tomorrow can always be a reversal. The short answer is that all of these technical analysis indicators can provide information like support and resistance, current trend, current momentum but they are a reflection of past price and/or volume movement and they predict absolutely nothing going forward. It's like looking in the rearview mirror to see where you have been.