Uptrend - > 60
Downtrend - < 40
Sideways - between 40 and 60
If however not interested in filtering for sideways trends and convert it to a long-short only strategy that stays in market all the time then it can be simply modified by setting both overbought/oversold thresholds to 50. In such a case uptrend will be above 50 and downtrend will be less than 50.
Note: wait for close for current bar to be confirmed as is calculated at close
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.
but anyway i just put your indicator on my chart (i was just randomly on the 4hr chart and have not checked the other time frames for this yet),,, so on the 4hr chart if you look closely on big moves you will see the color switch sooner than kinda the smaller moves ,, so what i mean by this is if price is about to have a bip pump the rsi line will turn green near the 40 line going upwards and vice versa in a big dump the rsi line will turn red just past the 60 line going down .... just curious if you noticed this @zzzcrypto123 ??