OPEN-SOURCE SCRIPT
RSI Correlation with future price
This script measures the correlation of the hourly RSI of 24 hours ago with the difference of price between now and the price 24 hours ago. In other words, this is an indicator which measures the predictive power of the RSI.
Green means that the price is strongly correlated with the past RSI (which is the normal state when the market is flat and there is no news).
Red means that the price is inversely correlated with the past RSI.
The hourly RSI is a leading indicator which enables you to (sort of) see into the future. It shows you how the current price is, compared to the price 24 (or 48) hours into the future.
If the RSI is low, it means the current price is low compared to the future price, and if the RSI is high, it means the current price is high compared to the future price.
So the hourly RSI really correlates (in the way I described) to the price 24 hours in the future.
Except when it doesn't!!!
What happens when the correlation breaks (RED on this indicator)? Usually there are important news - a strong signal external to the chart. There are either economy at large news, or security-specific news.
Following a strong break of this RSI-future price correlation, some cash can be made by understanding what happened and playing the restoration of the RSI-price correlation.
Green means that the price is strongly correlated with the past RSI (which is the normal state when the market is flat and there is no news).
Red means that the price is inversely correlated with the past RSI.
The hourly RSI is a leading indicator which enables you to (sort of) see into the future. It shows you how the current price is, compared to the price 24 (or 48) hours into the future.
If the RSI is low, it means the current price is low compared to the future price, and if the RSI is high, it means the current price is high compared to the future price.
So the hourly RSI really correlates (in the way I described) to the price 24 hours in the future.
Except when it doesn't!!!
What happens when the correlation breaks (RED on this indicator)? Usually there are important news - a strong signal external to the chart. There are either economy at large news, or security-specific news.
Following a strong break of this RSI-future price correlation, some cash can be made by understanding what happened and playing the restoration of the RSI-price correlation.
نص برمجي مفتوح المصدر
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.
نص برمجي مفتوح المصدر
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
إخلاء المسؤولية
لا يُقصد بالمعلومات والمنشورات أن تكون، أو تشكل، أي نصيحة مالية أو استثمارية أو تجارية أو أنواع أخرى من النصائح أو التوصيات المقدمة أو المعتمدة من TradingView. اقرأ المزيد في شروط الاستخدام.