Adaptive RSI Indicator

Concept: Definedge

Default period: 14

Two lines are plotted on the chart for the Adaptive RSI indicator.

1 – Green line represents Adaptive RSI

2 – The red line represents the Adaptive RSI Average

This formula is developed by Prashant Shah and it is a very useful tool. The RSI is made adaptive and plotted on the price chart. When price is above the green line, and the green line (Adaptive RSI) is above the red line (signal line), indicating a bullish trend. When price is below the green line, and the green line (Adaptive RSI) is below the rend line (signal line), it is a bearish scenario.

There are two advantages to using this indicator:

1 – RSI, the popular momentum indicator, can be applied as a stop-loss for trend filtration, as it appears on the price chart.

2 – The RSI is responsive to volatility.

The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.

This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.