Measuring RSI Event Outcomes with a Displacement Heat Map

Summary

This indicator studies what price does after an RSI threshold crossing or crossunder. For each event, it measures the highest upward and lowest downward displacement during a chosen period, relative to the close at the event bar. Displacement can be expressed in ATR units or as a fraction of price, then recorded as a point in a two dimensional heat map.

The map bins observations by positive and negative displacement, with cell shading showing how often outcomes fall in each bin. A percentile setting caps the displayed range so extreme observations do not stretch the map and leave most cells empty. The author interprets concentrations in the corners as indicating larger two sided moves, bearish outcomes, small moves, or bullish outcomes. Users can change the RSI settings, measurement window, reference scale, grid size, and percentile.

This is a descriptive tool for examining event behavior, not a demonstrated trading system. The document provides no sample results or performance statistics, and the heat map’s appearance depends on parameter choices and the chart data available.

Key ideas

• The tool records price extremes over a selected period after an RSI threshold event.
• It expresses upward and downward displacement in ATR units or as a percentage of price.
• A heat map groups event outcomes into bins and uses shading to represent their frequency.
• A percentile-based range limits the influence of extreme displacements on the displayed grid.
• The visualization describes historical outcomes but does not establish predictive power or profitability.

Tags

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