What it is
Larry Connors built CRSI for short-term mean reversion: the idea that sharp, short dips in an uptrend tend to snap back. Each part captures a different side of how stretched a move is: speed (the short RSI), persistence (how many candles in a row), and size (how unusual the last move was).
It reaches extremes far more often than a 14 period RSI, so its levels are set wider, at 10 and 90 or even 5 and 95.
How it is calculated
1. RSI of the close over 3 candles. 2. Streak: count consecutive up closes as +1, +2, +3 and down closes as -1, -2, -3 (an unchanged close resets to 0). Take a 2 period RSI of that streak value. 3. Percent rank: the percentage of the last 100 one-candle price changes that were smaller than the current one. 4. CRSI = the average of the three numbers.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| RSI length | 3 | 2 to 50 | The length of the price RSI. 3 is Connors' default; longer settings make it less extreme. |
| Streak length | 2 | 1 to 50 | The RSI length applied to the up and down streak. |
| Rank length | 100 | 5 to 500 | How many past candles the latest move is ranked against. |
How to read it
How to trade it
- 1
Only buy dips when the market is above its 200 period moving average, for example on 1 hour US30.
- 2
Wait for CRSI to close below 10.
- 3
Enter long at the close of that candle, or on a small limit order below it.
- 4
Use a stop based on volatility, for example 1.5 times ATR below entry, which on 1 hour US30 is often 100 to 150 points.
- 5
Exit when CRSI rises above 70, or after a set number of candles if it has not.
The dip buy is cancelled if price closes below the 200 period average (the trend has turned), or the stop is hit before CRSI recovers.
WickSpeak writes a plain-English reading of Connors RSI on the live candle: what it is, how stretched the short-term move is now, how dip and pop traders use it and what would prove the reading wrong. In Playbook, a condition can check when CRSI crosses above or below a level you set, is above or below a level you set, sits between two levels you choose, or is rising or falling, so a classic 'below 10 in an uptrend' play can be built and backtested with your own costs.
Best markets and timeframes
Designed for daily charts of stock indices, and also used on 1 hour and 4 hour charts of US30, NAS100 and gold. It is a short-term tool; holding periods are usually a few candles.
Common mistakes
- Buying below 10 in a downtrend. The method relies on the trend filter.
- Using RSI levels of 30 and 70. CRSI hits those constantly; its levels are 10 and 90.
- Setting a tight fixed stop. Mean reversion trades need room, so size the trade down rather than squeezing the stop.
Works well with
Questions traders ask
What are the default Connors RSI settings?
3 for the price RSI, 2 for the streak RSI and 100 for the percent rank. These are Larry Connors' original values and WickSpeak's defaults.
What is a good Connors RSI level to buy?
Below 10 is the usual buy level, and below 5 for fewer, more stretched setups. Connors used it only when the market was above its 200 day moving average.
How is Connors RSI different from RSI?
Standard RSI uses 14 candles of gains and losses. Connors RSI uses a much shorter RSI and adds a streak count and a percent rank, so it is faster and reaches extremes more often.
Does Connors RSI work on gold?
It can be used on gold, but it was designed for stock indices. Test it on gold with your own costs before trusting the levels, as gold trends differently.