The cyclic smoothed RSI indicator is an enhancement of the classic RSI , adding
additional smoothing according to the market vibration,
adaptive upper and lower bands according to the cyclic memory and
using the current dominant cycle length as input for the indicator.
The cRSI is used like a standard indicator. The chart highlights trading signals where the signal line crosses above or below the adaptive lower/upper bands. It is much more responsive to market moves than the basic RSI.
You can also review this short idea where BTC went down from 4300 USD (3 Sept 17) to 3700 USD (15 Sept 17) after the idea was posted and showed the clear short exit with the next low:
The indicator uses the dominant cycle as input to optimize signal, smoothing and cyclic memory. To get more in-depth information on the cyclic-smoothed RSI indicator, please read Chapter 4 "Fine tuning technical indicators" of the book "Decoding the Hidden Market Rhythm, Part 1" available at your favorite book store.
This is the open-source code version of the requested script already published as protected indicator back in 2017 "RSI cyclic smoothed". Now made public as v2. Would love to receive feedback and see your ideas.
there is no holy grail indicator in market but this one was very near to that when we used with price action. Thanks man...
tormentedchalupa
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@karthikvi, I am noticing that anytime it breaks out of its lower or upper band, price follows; which allows for a nice scalp. Amazingly good when combined with price action.
tormentedchalupa
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@tormentedchalupa, more specifically. when the bands contract and the cRSI line breaks out^
tormentedchalupa
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@tormentedchalupa, I am also noticing when set with a short length, the crsi will breakout and if the band it breaks out from spikes away from the crsi, a reversal is imminent. For example, if the crsi has a length of 10 and it has broken out below the lower band and continues lower, but the lower band all of a sudden spikes up.. then a reversal to the upside will soon occur.
@ankitmenezes, The green/red signals are only added to highlight/show the important turns in comparison to the standard RSI. The usage is to look out for turns above the adaptive oversold/overbought bands. But it should be easy to code these turns in a strategy. I have not coded it as there are multiple ways to use the indicator for trading strategies. The objective here is to share an improved RSI indicator. The same concepts how to use these indicator types for trading would apply.