RSI Settings for Intraday: Backtested Periods and Filters

The Relative Strength Index (RSI), designed by J. Welles Wilder, is a bounded momentum oscillator moving between 0 and 100. It measures the velocity and magnitude of recent price gains relative to recent price losses over a defined lookback window.

When traders configure rsi settings for intraday trading, the primary choice is the lookback period:

• Period 14 (Wilder Default): The traditional setting. Provides balanced smoothing across multi-hour intraday trends.
• Period 7 and Period 9 (Fast Scalping): Reaches oversold (<30) and overbought (>70) thresholds far more rapidly, producing frequent signals during the trading session.
• Period 21 (Slow Trend): Filters out intraday volatility spikes, requiring sustained institutional directional flow to reach threshold extremes.

We backtested all four lookback periods on 5-minute and 15-minute candles across 15 high-volume NSE equities over a 12-month period. Each test used an identical oversold bounce logic (buying when RSI dips below 30 and crosses back above 30, with a 2.0% stop loss and a 4.0% target).

All statutory Indian transaction charges—including STT, brokerage, exchange turnover fees, SEBI charges, stamp duty, GST, and execution slippage—were fully accounted for.

Famed technical analyst Andrew Cardwell established that in strong trending markets, RSI does not oscillate between traditional 30 and 70 levels. Instead, it operates within shifted ranges:

• Bull Market Range (40 to 80): In an uptrend, RSI finds support near 40 and pushes into overbought territory above 80.
• Bear Market Range (20 to 60): In a downtrend, RSI encounters resistance near 60 and pushes down toward 20.

We tested Cardwell range breakout and pullback rules on 15-minute candles (variant c1-cardwell-15m). The strategy finished at -1.1% after charges.

During the first 30 minutes of Indian market trading (9:15 to 9:45 AM), institutional order balancing and opening gap fills create violent price swings that trigger false RSI oversold bounces. To test whether skipping morning noise improves results, we implemented an execution rule that ignores all signals before 9:45 AM (variant o1-rsi3070-15m-after0945).

On 15-minute candles, this filtered strategy recorded a net return of -19.5% after charges across 827 trades. While it eliminated many losing morning whipsaws, it also skipped high-momentum opening trend runs, leaving overall profitability negative.

When retail traders lower the RSI period to 7 or 9 in pursuit of more trading opportunities, they dramatically increase portfolio churn. On a 5-minute chart with RSI 7, the strategy executes hundreds of trades a month, compounding brokerage and statutory taxes on every round trip.

Statutory friction in India—particularly the sell-side STT, exchange transaction fees, and GST—requires a substantial per-trade edge to overcome. Because mechanical RSI dip-buying wins only a modest percentage of trades, a high trade count turns into a net loss once charges are paid.

For intraday execution, RSI should never be traded in isolation. Use standard 14-period RSI combined with major support/resistance levels or VWAP trend confirmation to avoid low-probability entries.