What is Connors RSI?
The Connors RSI (CRSI) indicator helps to assess daily price movements, weighted by the price's last closing price, to assess overbought or oversold conditions. The Connors RSI is derived from the traditional RSI (Relative Strength Index) indicator.
How to Calculate?
Connors RSI includes three key components:
Relative Strength Index (RSI): The traditional RSI is used to identify overbought or oversold zones, usually using the change in closing prices over a 14-period time frame.
3-Period Average Change (3-Day Wilder's Moving Average of RSI): RSI values are averaged over three periods. This aims to capture overbought or oversold conditions using a shorter-term moving average.
2-Period Average Change of RSI: Calculated by the change of the RSI values over the last two periods.
Connors RSI is calculated by the average value of these three components.
CRSI(3,2,100)=[RSI(3)+RSI(UpDown Length,2)+ROC(100)]/3
The Connors RSI takes a value between 0 and 100.
Unlike the traditional RSI, the Connors RSI can help to capture short-term buying opportunities by offering more volatility and quick reactions.
A value above 90 can be considered overbought, while a value below 10 can be considered an oversold point.
Connors RSI can generate signals during slight corrections in the market. For example, when the market is in an uptrend, the Connors RSI may generate short-term sell signals. When the market is in a downtrend, it may generate short-term buy signals.
Connors RSI can be a good way to identify overbought and oversold levels and identify possible buying opportunities.
In addition to being used to identify overbought and oversold zones, the Connors RSI can also be used to assess momentum and price changes.
Combining the Connors RSI with additional indicators will increase its efficiency. Just like other technical analysis indicators, the Connors RSI can be more effective when used in combination with other technical analysis tools and market information, not just when used alone.
Using CRSI in Traderlands Strategy Creator
You can start creating a strategy by selecting the "Connors Relative Strength Index (RSI)" indicator from the list of indicators. An example strategy is shown in the image below. You can use the CRSI indicator in a way that suits you, by creating it in line with your research.
Rules you can add to the Strategy Creator Enter Algorithm Section:
Rules you can add to the Strategy Creator Exit Algorithm Section:
Settings you can make in the Position Settings Section:
Backtest Results:
1-year backtest result for BTC pair
WARNING: The entry and exit strategies in the images are written for educational purposes to explain how indicators work. It does not guarantee any profit.
When creating an algorithmic trading strategy, a rule set is usually created by connecting more than one indicator.