Kairi Relative Index: Formula, Threshold Crosses and Pine Example
The Kairi Relative Index (KRI) measures percentage distance from a moving average. A positive value means the selected price is above that average; a negative value means it is below. It does not establish that a stretched price must return to the average.
Formula and interpretation
For the close-based SMA version used here:
KRI = 100 × (Close − SMA(Close, length)) / SMA(Close, length)
If the close is 105 and the average is 100, KRI is +5%. If the close is 95, it is −5%. These are arithmetic examples. The average must be available and nonzero. A 14-bar average means fourteen chart bars, not fourteen days on every timeframe.
KRI is unbounded, unlike RSI's usual 0–100 scale. Universal thresholds such as ±8%, ±15% or ±20% are not established for every stock and timeframe. Inspect the distribution using development data, record a proposed threshold and evaluate it on separate data.
Correctly distinguish entering and leaving an extreme
Crossing below a negative threshold enters the lower extreme. Crossing above that threshold exits it. The earlier condition “below −10 now, at or above −10 previously” described entering the extreme, not bouncing out of it.
This complete indicator marks closed-bar returns from illustrative thresholds. It does not place strategy orders:
//@version=6
indicator("Kairi threshold transitions", overlay=false)
int length = input.int(14, "SMA length", minval=1)
float lower = input.float(-5.0, "Lower threshold")
float upper = input.float(5.0, "Upper threshold")
if lower >= upper
runtime.error("Lower threshold must be below upper threshold")
float average = ta.sma(close, length)
float kri = not na(average) and average != 0.0 ? 100.0 * (close - average) / average : na
bool crossedUp = ta.crossover(kri, lower)
bool crossedDown = ta.crossunder(kri, upper)
bool returnFromLow = barstate.isconfirmed and crossedUp
bool returnFromHigh = barstate.isconfirmed and crossedDown
plot(kri, "KRI", color=color.blue)
hline(0, "Zero", color=color.gray)
hline(lower, "Lower", color=color.green)
hline(upper, "Upper", color=color.red)
plotshape(returnFromLow, "Return from lower extreme", shape.triangleup, location.bottom, color.green, size=size.tiny)
plotshape(returnFromHigh, "Return from upper extreme", shape.triangledown, location.top, color.red, size=size.tiny)
The ±5 inputs demonstrate transitions; they are not optimized settings. The line itself can change during a forming candle, while the markers require confirmation. See TradingView's bar-state documentation for that distinction.
Test the hypothesis separately from the display
Pineify includes a Kairi calculation using close and its SMA. To turn an indicator condition into a strategy, additionally define order timing, position size, exits, stops and costs. Inspect the resulting trade list in the strategy test rather than treating a marker as a fill.
Compare threshold-return rules against zero-crossing rules on the same data. A trend filter changes which trades are included; it does not guarantee fewer losing trades. No SPY Sharpe ratio or AAPL, TSLA or NVDA observation is verified here. Record the full method before claiming a result.