Kairi Relative Index
Candlefocus EditorWhen the closing price is above the SMA, the KRI will be positive, indicating a bullish market, implying that the asset is entering an uptrend and could be ripe for a buy signal. When the closing price is below the SMA, the KRI will be negative, indicating a bearish market and suggesting a sell signal. Extreme readings in the KRI could point to a continuation of the current trend, with positive readings in the KRI being considered buy signals, while negative readings in the KRI would typically be seen as sell signals.
It is important to note, however, that extreme readings in the KRI will vary by asset, with more volatile assets reaching much larger extremes than more sedate assets. While an asset with a higher volatility may reach a KRI reading of 30 or 40 points, an asset with less volatility may not reach the same level of extremes.
Moreover, the KRI is not an accurate signal to use for timing a market entry or exit. Investors should consider the KRI in conjunction with other forms of technical analysis, such as chart patterns or momentum indicators, to generate a complete picture of the market and make more informed trading decisions.
In general, the Kairi Relative Index is a valuable tool for investors who in determining whether a market is trending or not. It can help identify when momentum is shifting and be combined with other indicators to generate trade signals. However, it should not be relied upon alone, as it is not an exact timing signal.