The Harmonic Strength Index (HSI) is the primary indicator for accompanying harmonic pattern identification and it is designed to replace RSI for harmonic traders.
HSI is used to confirm and identify harmonic patterns as well as to time entries within the Potential Reversal Zone (PRZ). HSI is unique in that it oscillates at a far more active frequency than RSI while still managing to avoid extended stays above overbought/oversold or repeated false signals in close succession. Instead, HSI takes the first few hundred bars of the chart to adapt is oscillation frequency to the behavior of the instrument and then continues to update its response as time passes. The result is informative, decisive signals throughout varying levels of market volatility.
HSI and HSI Arrows loaded into a Daily chart
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Note: The HSI indicator can require a large number of price bars to prime the calculation. For securities and/or bar intervals that do not have a lot of historical bars it is possible that the HSI will not be able to render a plot. |
Scott Carney has prepared a document that provides a more in-depth discussion of the HSI and it's application:
•HSI User Guide (pdf)
See Also:
