Connors RSI on Gold

What it shows

A fast blue line in a 0 to 100 pane, with grey marks at 70, 50 and 30 and a shaded strip between 30 and 70. It crosses that strip in a few candles where a plain RSI would drift.

How Pravex works it out

1. Part 1: the RSI of the source over the price RSI length, using Wilder smoothing.
2. Part 2: count the streak, +1, +2, +3 for each candle in a row that rose and -1, -2 for each that fell (0 when unchanged), then take the RSI of that streak over the streak RSI length.
3. Part 3: compare the latest one-candle percent change of the source with the changes in the ranking window before it. The share of them at or below the current change, in percent, is the percent rank.
4. Connors RSI = (part 1 + part 2 + part 3) ÷ 3.
5. Invented parts of 80, 90 and 70 average to (80 + 90 + 70) ÷ 3 = 80.

Settings

Setting	Default	What changing it does
Price RSI length	3	The length of the first RSI. At 3 it is very fast; a longer value makes part 1 calmer.
Streak RSI length	2	The length of the RSI that is run on the streak. A longer value makes part 2 react more slowly to a change in the streak.
Ranking window	100	How many earlier changes the latest change is ranked against. A shorter value makes the rank swing more; a longer one compares with a longer history.
Source	Close	The price whose changes are used in all three parts. Close suits this one, since the streak counts closes that rose or fell in a row.

How traders read it

Above the 70 mark, the last few candles were strongly up by all three measures; under 30, strongly down. It was presented for short-term pullback trades, so a common use is a deep dip inside a rising market that then turns back up, often with cut-offs set lower than 30.

The line is built to swing, so it spends much of its time near the ends. A reading around 50 means the three parts disagree or sit in the middle, and the line crosses it often.

Because part 3 ranks the latest change, one very large candle can pin the line at an extreme for a candle or two and then let it drop.

When it misleads

In a strong trend the line keeps returning to an extreme, so a high or low reading is not a turning point by itself. The first 100 candles or so are used up by the rank, so the line starts late on a chart. Calm gold hours produce small candles whose ranking against the last 100 still decides part 3, so the line can swing hard on almost no movement.

Questions and answers

What are the three parts of Connors RSI?

They are averaged together: a short RSI of price, an RSI of the up-down streak, and the percent rank of the latest change. The result runs from 0 to 100.

Why are the Connors RSI lengths so short?

Pravex uses 3 for the price RSI, 2 for the streak RSI and 100 for the ranking window. The first two are tiny on purpose: the tool is made to catch two- or three-candle swings, not trends.

Is Connors RSI quicker than a normal RSI?

Yes. A plain RSI looks only at the size of recent rises and falls. Connors RSI adds the streak and the rank of the latest change, so it moves quicker and spends more time at the ends.

Why does Connors RSI start late on the chart?

The percent rank needs 100 earlier changes before it can be worked out, so the line begins after that many candles have loaded.

Related: Chande Momentum Oscillator, Stochastic Momentum Index, Relative Volatility Index, Relative Strength Index, every indicator.