RSI Trends

RSI is a momentum indicator , however most people seem to be using it to go against the momentum by trying to identify tops/bottoms using it. Its in my opinion the wrong way to be using it. It can be easily used for trend following which seems like a better use for it.

Uptrend - RSI > 60
Downtrend - RSI < 40
Sideways - RSI between 40 and 60

If however not interested in filtering for sideways trends and convert it to a long-short only strategy that stays in market all the time then it can be simply modified by setting both overbought/oversold thresholds to 50. In such a case uptrend will be above 50 and downtrend will be less than 50.

Note: wait for close for current bar to be confirmed as RSI is calculated at close

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How will i know complete detail of this indicator please reply me.i am not understanding what is the importance of three colours which zzzcrypto has taken,i know about two colors green for bullish bar and red for bearish but he has used black bar also,why please reply me
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zzzcrypto123 benjobenjosachin
@benjobenjosachin, hi, this is just meant to be an example of how to use RSI for trendfollowing. Its basically an approach where a person is supposed to be long in an uptrend and short in a downtrend, with no targets and to ride the position until the trend changes. There is an additional filter added for sideways trends(grey color) where the market is not moving much in either direction. Benefit of that is that it eliminates the need for being in a position all the time. For more info on what trendfollowing is you should either google it or read books by Michael Covel.
Thank you zzzcrypto123
Excellent work and it works perfect together with On Balance Volume and Donchian Channel/ Regards Sören
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@SJWLC, thanks, can either use it alone or combine it however with any other indicator if wish
@SJWLC, brother i am not getting,why zzzcrypto123 has taken three colours of bar,and what indicates green and red line in the indicator.please make me understand
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SJWLC benjobenjosachin
@benjobenjosachin, I do not use the colored bars. I am only interested in when the RSI indicate green for uptrend and red for downtrend.

Maybe zzzcrypto123 can answer your question so it will be the best answer?!
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@benjobenjosachin, i replied on your other comment
benjobenjosachin zzzcrypto123
@zzzcrypto123, does it work in all market.sir ,like equity,forex,future etc
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