Connors RSI – What It Is & How to Trade with It

Connors RSI – What It Is & How to Trade with It

What is Connors RSI?

The Connors RSI (CRSI) is a modified version of the standard RSI developed by Larry Connors to improve momentum accuracy by incorporating three key components:

1. Relative Strength Index (RSI): Standard 3-period RSI to measure price momentum.
2. Streak Length: Measures the number of consecutive up or down closes.
3. Rate of Change (ROC): Tracks price volatility over the last 100 periods.

The final CRSI value is an average of these three components, making it more responsive to short-term price action than the traditional RSI.

Key Features of Connors RSI

• Combines RSI, trend streaks, and volatility for greater accuracy.
• Identifies overbought (above 90) and oversold (below 10) conditions.
• More responsive than the standard RSI.

How to Use Connors RSI in Forex Trading

1. Overbought & Oversold Strategy

Connors RSI helps traders identify reversal points with more precision:

• Buy Signal: When CRSI drops below 10 (deeply oversold) and starts moving up.
• Sell Signal: When CRSI rises above 90 (deeply overbought) and starts moving down.

Trading Tip: Works best in ranging markets, where price oscillates between support and resistance.

2. Connors RSI Pullback Strategy

CRSI is effective in detecting pullback entries within trends:

• Buy when: CRSI drops below 20 in an uptrend, signaling a pullback.
• Sell when: CRSI rises above 80 in a downtrend, signaling a retracement.

3. Connors RSI with Moving Averages

Combining CRSI with a moving average (e.g., 50 EMA) helps confirm trade signals:

• Buy when: CRSI crosses above 10 & price is above the 50 EMA.
• Sell when: CRSI crosses below 90 & price is below the 50 EMA.

Pros and Cons of Using Connors RSI

✅ Pros:

• More accurate than the standard RSI.
• Effective for short-term trading and pullback entries.
• Works well in both ranging and trending markets.

❌ Cons:

• More complex than traditional RSI.
• Requires fine-tuning for different forex pairs.

Final Thoughts

The Connors RSI is an advanced momentum oscillator that improves upon the traditional RSI by incorporating trend and volatility factors. When combined with moving averages or support/resistance levels, CRSI enhances trade accuracy and decision-making.