RSI Trend Filter Using Candle Direction and Threshold Zones
Summary
The RSIFilter colors bars in a separate indicator window according to the relationship between an RSI-derived trend state and the direction of the current candlestick. When candle direction agrees with the trend, the bar is shown in a lighter shade; when they disagree, it is darker. RSI values beyond configurable upper or lower thresholds determine the directional state, while readings between those levels receive a neutral gray treatment.
The description explains a visual filtering concept rather than an entry or exit system. It gives example threshold defaults and attributes the indicator to an external author, but supplies no performance evidence, asset-specific guidance, or rules for interpreting sequences of colored bars. The thresholds therefore indicate how the display is configured, not validated levels for identifying trend strength or generating profitable trades.
Key ideas
- The indicator assigns a trend state from RSI readings beyond configurable upper and lower thresholds.
- Bar shade indicates whether the candlestick direction agrees with that RSI-derived state.
- Readings between the thresholds are displayed in a neutral color.
- The document describes a visual filter and provides no evidence that its colors improve trading results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.