An RSI-Based ZigZag Trend Indicator

Summary

This document describes a chart indicator that marks trend turning points using changes in the Relative Strength Index (RSI). With the stated default settings, it draws a point when RSI falls from the upper threshold of 65 or rises from the lower threshold of 35. Users can adjust these thresholds and the RSI lookback period, which is set to 14 by default.

The indicator connects successive RSI change points in a ZigZag-like line and projects corresponding price highs for uptrend points and price lows for downtrend points. It colors the plotted uptrend and downtrend lines differently on the main price chart. The description explains the indicator's construction and display, but supplies no trading rules, test results, or evidence that the turning points predict future prices. As with other threshold-based indicators, its behavior depends on the selected parameters.

Key ideas

• The indicator identifies turning points from RSI moves across upper and lower thresholds.
• Its default RSI thresholds are 65 and 35, with a 14-period lookback.
• It connects successive RSI change points in a ZigZag-like line.
• It maps uptrend points to price highs and downtrend points to price lows.
• The document gives no backtest evidence or complete trading rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.