My RSI side-notes

* Trading @ RSI 85 or 15 (rsi 14/30min, 1month chart) rarely ends in a loss.

(Obviously you short when rsi is at or above 85 and buy when rsi is below or at 15)

It will either give you sufficient indication & time to square-off with no-profit-no-loss, or
will result in medium-to-large profit.

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* A strong price movement rarely stops before rsi 85/15.

Therefore, if you see a sudden &/or strong price move but rsi hasn't still touched 85/15, stay away. The momentum is likely to continue atleast till rsi 85/15 wall.

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* Dull and weak price movement is generally confined to rsi 75-25 band.

This indicates range-bound movement.

For decisive rally to be confirmed rsi must first touch 85/15.

Ofcourse, RSI can touch 85/15 without rally (due to short-term strength), but there can't be a rally without rsi 85/15.

So, stay away till rsi touches 85/15 wall.

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* After hitting 85/15, rsi is likely to retreat somewhat to take a second shot at the 85/15 wall.

If the price fails to make a "substantially" higher peak when rsi hits 85/15 again, the rally can be considered as near its end.

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* Strong rally doesn't end when both rsi and price make their highest peak or lowest valley together, but when they make scattered ones.

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* if rsi retreats but price doesn't retreat "much".

the previous trend hasn't ended, it is expected to continue; rsi has not exhausted.

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* rsi and price both retreat.

enjoy the profit, atleast till rsi 85/15 wall.

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* Always keep the larger & overall trend in mind.

This will help you in taking a commonsense and alert decision about the safer direction of trading.

For example if the broader trend is down, shorting at rsi 85 is safer than buying at rsi 15 and below.

The latter will demand more attentive trading.

This broader trend can be judged from sma 34/8 or rsi 14/1day on 3month or 6 month charts.

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(All these rsi notes are based on observations on rsi 14/30min graph on 1 month chart on google finance.

This is because 14/30min rsi on 1 month chart is best for 2-5 days swing-cum-positional trade.

Also, rsi pattern is more accurate and predictable for nifty futures trading.)