Just realized a lot of people still don't grasp how to actually apply RSI in their trading. Let me break down what I've found works with the best RSI settings.

First, the oversold/overbought approach. When RSI dips below 30, that's oversold territory - price usually bounces back. I wait for confirmation of a reversal, then go long. Above 70? Overbought. Same logic in reverse for shorts. The 50 midline is key too - above it suggests bullish momentum, below it leans bearish. Pretty straightforward.

But here's where it gets interesting. The two-period divergence setup has changed how I read the market. Running RSI 5 against the standard RSI 14 lets you catch early reversals that the longer period might miss. RSI 5 reacts faster to recent price action. When the 5-period crosses above the 14-period while oversold (below 30), that's a solid buy signal. Opposite for sells when the 5 crosses below while overbought (above 80). Honestly, combining this with pivot points has noticeably improved my entries.

Trendline trading on the RSI chart itself is another angle. Connect the highs and lows on the RSI itself, not just price. When you draw lines through three or more points on that RSI chart, a break of those trendlines often precedes price action breaking its own support. That early warning is valuable. You get the move before it happens on the main chart.

The divergence play is probably the most powerful. Bearish divergence - price makes a higher high but RSI makes a lower high. That's typically where bull runs top out. Bullish divergence is the opposite: lower price low but higher RSI low. Both signal potential reversals before they actually happen.

Some of my best trading has come from applying these best RSI settings on higher timeframes like 4-hour or daily. You get cleaner signals, fewer false breakouts. Multiple entry and exit opportunities once you know what to look for. Worth testing these approaches on your own charts.