Description
ConnorsRSI is a momentum oscillator developed by Larry Connors and the team at Connors Research. It’s used for identifying overbought/oversold conditions in shorter trading timeframes. The traditional 14-period RSI indicator developed by Welles Wilder reacts too slowly to be useful for short-term trading; Connors Research sought to improve on this indicator, making it more suitable for shorter timeframes.
They initially developed their RSI(2) strategy, which used a 2-period RSI and moved overbought/oversold levels out to 90 and 10, but this approach still resulted in more false signals than desired. The team’s subsequent efforts resulted in the development of a brand new composite indicator.
ConnorsRSI combines the momentum measurement of RSI with components that measure the duration of the trend and the magnitude of the price change, to create a more reliable short-term RSI indicator.