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1) 20-60 signifies a downtrend
2) 40-80 signifies an uptrend
3) 40-60 signifies a trading range
I only like to trade with the trend so I use the 3 period RSI as a trigger
when it crosses 80 (short) or 20 (long). One, first needs to determine
whether an issue or index is:
1) Trending
2) In a trading range
3) About to have a CIT
I use the parameters above to determine if the issue or index is trending or
not. I also look to the RSI 3 to see if it's staying above 80 or below 20 for
more then 2 periods. A good sign for a CIT is the first time the RSI 14 has
failed to cross 60 at the same time the RSI 3 has crossed 80 and then crossed
back under 80 (from uptrend to downtrend). See attached.
Lenny
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