Koalafied RSI State

Concept taken from RSI : The Complete Guide by John Hayden
2:1 momentum is associated with RSI values of 66.67 and 33.33 respectfully. In an Uptrend an RSI value of 40 should not be broken and in a downtrend a RSI value of 60 should not be exceeded. If so, then there is buying/selling pressure in the opposite direction (but not necessarily enough for a trend reversal). Alternatively it may show the presence of HTF traders. 4:1 momentum ( RSI values of 80/20) can be associated with extreme market conditions, typically thought of as being Overbought or Oversold.

This script shows three market states based on RSI
1. Trend State - Triggered by RSI breaking a 2:1 momentum level
2. Trend Momentum - When RSI is above/below a 2:1 momentum level
3. Overbought/Oversold - When RSI is above a 4:1 momentum level

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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