Kairi Ritsu KRI

The Kairi Ritsu (KRI) is a technical momentum oscillator primarily used to identify overextended market conditions. It measures the percentage deviation of the current price from its Moving Average.

Here is a guide on how to interpret and trade using this indicator:

1. Core Logic: Mean Reversion

The fundamental principle of the KRI is that prices eventually return to their average.

• When the KRI is at a high positive value, the price is "stretched" too far above the average (Overbought).

• When the KRI is at a low negative value, the price is "stretched" too far below the average (Oversold).

2. Identifying Extremes (Overbought & Oversold)

Unlike indicators with fixed boundaries (like RSI), the KRI levels depend on the asset's volatility.

• For Major Forex Pairs: Typical extreme levels are often found at +/- 2.0%.

• For Volatile Assets (XAUUSD, US30, US100): You might look for extremes at +/- 3.0% to 5.0%.

• Action: Look for the KRI to reach these historical extremes and start curving back toward the Zero Line as a signal for a potential reversal.

3. The Zero Line Cross

The Zero Line represents the point where the Price and the Moving Average are equal.

• Bullish Signal: When the KRI crosses above 0, it confirms that the price is gaining upward momentum relative to its average.

• Bearish Signal: When the KRI crosses below 0, it confirms that the price is gaining downward momentum.