Please refer to for info on how to use the cRSI indicator.
Info on the chart.
1) Red dotted lines = cRSI crossed back from overbought and crossover in
2) Red solid lines = Bear divergence and crossover in
3) Green dotted lines = cRSI crossed back from oversold and crossover in
4) Green solid lines = Bull divergence and crossover in
5) Black transition = cRSI crossover but NO crossover in
I added several extra items:
1) A Weighted Moving Average (WMA) to track the general trend of the cRSI signal.
2) Color the region between the upper and lower cRSI bands based on if the cRSI signal is above or below the WMA (green above, red below). This can help determine if the equity is in correction or rally.
3) Indicators for when the cRSI crosses from above the upper band back into the band (red dot) and crosses from below the lower band back into the band (green dot).
These extra items can help you time buy and sell. It is important that you select an appropriate time frame. 1D and 4h seem to work well.
1) Red dots are potential times to sell/short. The higher the upperband the more likely of a bigger correction (corresponds to the size of your order).
2) Green dots are potential times to buy/long. The lower the lowerband the more likely of a bigger rally (corresponds to the size of your order).
3) Crossing of the WMA is also a critical trigger for selling and buying. Crossing below the WMA (start of red region) is a sell and rising above (start of green region) is a buy.
You can adapt this code to make your own strategy. It is tricky to use just the cRSI indicators by themselves as they can create false buy/sell triggers. It works very well with strong rallies and correction,
but the smaller ones can create some mistakes. In addition, like all indicators that are based on moving averages there is a latency issue. That means they tend to trigger right after key events. Perfect timing
is not possible strictly with these indicators, but they do work very well "on average." Corrections and the counter rallies inside them are especially tricky. Correction usually happen with a pair of drops with
small counter trend rally in between. You need to be careful and not buy when the counter rally rises back above the lower band. In addition, the price can continues to fall even when the cRSI is rising. The same
is true for tops. Often times a strong rally will be followed by a falling cRSI yet the price continues to climb, sometimes 15-25% more. This is where looking at a higher time frame (1W) maybe helpful.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.