The default settings for this strategy are:
RSI Overbought: 80
RSI Oversold: 20
When the gets above 80, the line will turn red and the script will begin looking for a specific type of candle to go short. The same is true when the gets below 20, but the line will turn green and look for longs. It is best used as a back-testing aid, but it can also be used to send emails or SMS alerts whenever the conditions are met. It can also be used as an alternative colored indicator by removing the signals in the settings menu and changing the parameters to whatever you normally use. This can aid in divergence and overbought/sold strategies.
The bright green and bright red lines represent the first type of candle.
The dark green and red lines represent the second type of candle.
Some pairs perform best with only one of these entries, while others work fine with both.
This is a counter-trend or consolidation strategy, and is best used in combination with trend-continuation or trend-following strategies. As always, make sure you back-test it before you use it to trade as it works better on some pairs than others.
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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.