RSI chop filter

colinmck Updated   
This demonstrates how you might filter your signals using RSI, but the same technique could be applied to Stochastic RSI and any other oscillator that has overbought and oversold conditions.

Use it as a visual indicator to determine when to enter a trade:

Red = Chop zone (no trade)
Bright red = Tight chop (dear god stay away)
Green = Overbought or oversold (signals permitted)
Bright green = Crossing up/down (take the trade)

To apply the filter, simply add 'and not chop' after your conditions as seen in the commented out example.
Release Notes:
Swapping out a variable. A minor improvement.
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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