This indicator is based on the inverse relationship between CHOP and RSI.
Bar color If the RSI is greater than CHOP, the Bar color will be blue. If CHOP is greater than RSI, the bar color will be red.
CHOP If CHOP is less than 38.2, the color will turn blue. positive If the CHOP is between 38.2 and 61.8, the color will be yellow and neutral. If CHOP is greater than 61.8, the color will turn red. negative
Rsi If Rsi is greater than 61.8, the color will turn blue, positive If Rsi is between 38.2 and 61.8, the color will be hexagonal and neutral If Rsi is less than 38.2 the color will be red, negative
The Choppiness Index (CHOP) is an indicator designed to determine if the market is choppy (trading sideways) or not choppy (trading within a trend in either direction). The Choppiness Index is an example of an indicator that is not directional at all. CHOP is not meant to predict future market direction, it is a metric to be used to for defining the market's trendiness only. A basic understanding of the indicator would be; higher values equal more choppiness, while lower values indicate directional trending.
Relative Strength Index (RSI) The Relative Strength Index (RSI) is a well versed momentum based oscillator which is used to measure the speed (velocity) as well as the change (magnitude) of directional price movements. Essentially the RSI, when graphed, provides a visual mean to monitor both the current, as well as historical, strength and weakness of a particular market. The strength or weakness is based on closing prices over the duration of a specified trading period creating a reliable metric of price and momentum changes. Given the popularity of cash settled instruments (stock indexes) and leveraged financial products (the entire field of derivatives); RSI has proven to be a viable indicator of price movements.
so blue colour is for buy signal and red is for sell? and don't trade
when colour is yellow / neutral?
ceyhun
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@salmankhan1920, change1 = rsi > ci ? #0000FF : rsi < ci ? #FF0000 : #FFFF00
barcolor(Barcolor ? change1 :na)
barcolor gives the main trend. The other part can be confusing so I didn't add it.
anshulsrivastavavil
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your indicator has solved many problems during positional trading .. its really a great job .. thanks and keep helping retail investors like this . is there any platform, where we can know if any thing new posted / developed by you ,for retail inveastors like us.
ceyhun
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@anshulsrivastavavil, thank you i am sharing the indicator here I do stock analysis on twitter
AsiaRoo
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@ceyhun, what's your twitter handle? I searched for ceyhun there but none of the accounts looked stocks related. thanks!
Snatchshis
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A "Thank you very much" for the script, and a additionel "...you'r da man" for the basic explanition how to use it. I've seen a lot of comments with newbies, as my self, that asking for something like this, that you provided
ceyhun
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@Snatchshis, If the rsi is greater than the chop, a blue bar color is formed, a buy is made and extreme divergences rally.
rooney888
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this is one of the best indicators i have seen to identify breakouts...........great job
when colour is yellow / neutral?