The Best Technical Indicator Combination Ever: RSI + Choppiness Index

When it comes to mastering the art of trading, selecting the right technical indicators can make all the difference. In a world where YouTube videos and online forums are flooded with countless strategies, many of which promise to bring success, there’s one combination that stands above the rest—yet it remains largely overlooked by the masses. This genius combination of technical indicators is the RSI (Relative Strength Index) paired with the Choppiness Index, a dynamic duo that can drastically improve your trading accuracy and profitability.

While the internet is full of strategies, and every other trader seems to have a “secret sauce” to success, few ever mention this powerful pair. That’s because they may not truly understand the full potential of combining these two indicators. But once you learn this strategy, the results can be nothing short of remarkable. With the RSI pinpointing overbought or oversold conditions and the Choppiness Index giving you insight into market trends, you gain the ability to read price action with clarity, reduce risks, and increase profit potential.

The beauty of this combination lies in its simplicity and effectiveness. Traders often get lost in the complexity of multiple indicators, but this blend of RSI and Choppiness Index helps to streamline your decision-making process while keeping your trades highly accurate. If you commit to understanding and mastering this strategy, you will always be ahead of the curve. This combo is one of the most profitable technical indicator pairings you can learn, and it is designed to minimize losses while maximizing gains.

So, if you want to rise above the noise and adopt a strategy that actually works in the ever-volatile world of stock markets, the RSI + Choppiness Index combination is your key to sustained success.

Why RSI + Choppiness Index?

The RSI helps traders identify overbought and oversold conditions, while the Choppiness Index indicates whether the market is trending or moving sideways. When combined, these two indicators provide unparalleled insight into market dynamics, enabling traders to make smarter decisions.

Core Signals:

Hard Sell Call: When RSI goes below 50 and Choppiness Index goes below 50 simultaneously.
Hard Buy Call: When RSI goes above 50 and Choppiness Index goes below 50 simultaneously.
Exit Signal: Exit only when RSI drops below 50 after a buy signal.
For long term holding more than 1 year use it on Weekly chart . For mid term like 3 – 6 month holding use it on daily chart. For short term, 1 week or two week use it on hourly chart. For intraday use it on 5 minutes chart. If you are a option buyer you can also use it on the stock or index chart to catch the momentum. If RSI and Choppiness both goes below 50 buy PUT and if RSI goes above and choppiness goes below 50 then buy CALL option.

Setting Up RSI + Choppiness Index on TradingView

Add Indicators:
- Open your candle chart on TradingView.
- Add the RSI indicator from the “Indicators” menu.
- Add the Choppiness Index indicator in the same way.
Adjust Settings:
- For both indicators, adjust the line thickness for better visibility.
- Add a visible middle line at the 50 level for both RSI and Choppiness Index.
Interpret the Chart:
- Look for moments when RSI and Choppiness Index cross above or below 50 as described above.

Case Studies: Protecting Investments During Crashes

1. The 2008 Financial Crisis

In early 2008, the RSI + Choppiness Index combination provided clear sell signals before the market began its sharp decline. For instance, as RSI fell below 50 and the Choppiness Index also dropped, a clear hard sell signal emerged, helping traders avoid catastrophic losses.
Impact: Investors who acted on this signal saved substantial capital during one of the worst financial crises in history.

On the daily chart it shown a exit signal on 16th Sep-08, from there investor could save 38% wealth in Indian market (Nifty 50).

After the crash it gave a clear entry signal from bottom for 59% profit.

2. 2016 Market Correction

The 2016 global market correction was another example where this combination shined. The indicators provided timely sell calls before the market’s steep drops.
Example Stock: In leading tech stocks, such as Apple, sell signals were triggered before major corrections, preserving gains.

3. The 2020 COVID-19 Crash

The pandemic-induced crash in early 2020 was sudden and severe. This indicator combination predicted the sell-off weeks in advance. As RSI and the Choppiness Index dropped below 50 together, traders received timely alerts to exit positions, protecting them from significant losses.
Bitcoin: During the Bitcoin crash in March 2020, the same strategy applied. Investors received clear sell signals just before the market’s steep decline.

If someone could use the indicator then it could save 34% wealth.

Profit Examples:

Tesla: RSI + Choppiness Index provided hard buy signals before Tesla’s exponential rise in 2020. Traders who followed the strategy rode the trend and exited with significant profits as RSI later fell below 50.

Signal still open on the weekly chart of Tesla.

Bitcoin Rally: In 2021, the indicators identified buying opportunities during dips, allowing traders to profit from Bitcoin’s bullish trends.

Signal still open on the weekly chart of Bitcoin.

Advantages of RSI + Choppiness Index Combination

Timely Sell Signals: Avoid losses by selling before market corrections, as demonstrated during 2008, 2016, and 2020 crashes.
Works in Any Market: This strategy is effective for stocks, cryptocurrencies (e.g., Bitcoin), commodities (e.g., gold), and forex.
Versatility: Suitable for short-term, long-term, and intraday trading.
Avoid Sideways Markets: The Choppiness Index identifies range-bound conditions, helping traders stay out of unproductive trades.
Timely Buys Before Steep Rises: Enter trades just before strong upward trends, ensuring maximum gains.
Capital Protection: Prevents heavy losses during volatile market conditions.

Conclusion

The RSI + Choppiness Index combination is undoubtedly the best technical indicator combination ever for traders seeking consistency and precision. By leveraging these indicators, investors can confidently navigate markets, avoid pitfalls, and capitalize on lucrative opportunities. The case studies from the 2008 financial crisis, the 2016 correction, and the 2020 COVID-19 crash illustrate the immense value of this strategy in protecting investments and maximizing profits.

Whether you’re trading stocks, Bitcoin, commodities, or forex, this indicator combination works seamlessly across all markets. Take advantage of this powerful tool and transform your trading journey today. For visual references and additional insights, explore our charts and examples that demonstrate this strategy in action.