Indicators & Strategy
How to Use the RSI in TradingView: Settings and Divergence
RSI is probably the most misused indicator: treat 70 as a sell and 30 as a buy, and it works in a range but stops you out repeatedly in a trend. The problem isn't the indicator — it's the usage.
Add it first
Search RSI (Relative Strength Index) in indicators, default period 14. RSI measures the relative strength of up vs down moves over the last N bars, on a 0–100 scale.
The truth about 70/30
- Ranging market: a pullback from above 70 or a bounce below 30 works as a filter for range highs and lows;
- Trending market: in a strong trend RSI "flatlines" above 70 for a long time — here 70 isn't a sell, it's evidence of trend strength. See flatlining and think "very strong trend," not "due to reverse."
Spotting divergence in three steps
- Price makes a new high (or low); mark those two swing points;
- Read RSI at those two points: new price high with a lower RSI high = bearish divergence; new price low with a higher RSI low = bullish divergence;
- Wait for confirmation: divergence is only a "momentum fading" warning; it must be followed by structure breaking (e.g. a break of the prior low) to count. Divergence can flatline three or four times — buying the dip on it directly is a common way to lose.
Period and alerts
Period 14 is the balanced value: smaller (9) is more sensitive with more false signals; larger (21) is slower and suits bigger timeframes. Rather than optimizing the period, fix it and confirm across timeframes. Right-click the RSI to set an alert on its value, e.g. "RSI crosses above 50," turning screen-watching into waiting for a push — best paired with the alerts guide.