The standard setting of RSI is 14 periods, with the 30 line being oversold and the 70 line being overbought. However, it is not effective to use only that number as an entry. In the long time frame, it shows the momentum of bullish/bearish pressure and does not reverse immediately. In the short time frame, the reversal appear frequently and it is difficult to make a decision.
This script calculates the zone based on the recent RSI fluctuation. You will fix your entry direction whether the center line is above or below the RSI(50). A return to the zone is a sign of entry, which eliminates hesitation. It may be able to be used even in parallel range or against trend.
Awesome script, thanks for sharing! Just a quick question: you use a wma of the rsi instead of simply plotting the rsi. What's your reasoning here? Is it just a matter of smoothing the line?
agekara
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@Algoswing, I'm planning to use at longer time frame and do not need detailed price action. A trades with frequent signatures may result in more entries, but also in more losses. So I smoothed out RSI to determine if the return to the zone is an intrinsic price action.
jakey22999
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This script is literally the best thing since sliced bread! Thank you so much =)