RSI Trend Line

2021年10月6日

I took a concept similar to the "Adaptive RSI" to get the RSI overlaid on a price chart. The problem I have with the Adaptive RSI is to me it sticks too closely to price. I wanted something much more visually helpful that can provide actual tradable signals and strategies.

The orange line you are seeing is the "RSI Trend Line"
The further the RSI moves away from a value of 50 (the "zero line"), the more you see this orange line move away from price. This helps visualize the strength of price pushing away from a neutral value to a position of strength or weakness-- if orange is below price then relative strength is high; if orange is above price then relative strength is low. When price is equal to the orange RSI line, the RSI is at a value of 50.

In addition to the trend line, you can enable bands which reflect Overbought and Oversold levels. If you leave the responsiveness to a value of 1.0 and removed any smoothing, these should pretty accurately reflect an actual RSI chart topping the OB and OS lines (default 70 and 30, respectively). (They're still very close with different responsiveness and smoothing values)

The conversion or scaling of RSI value onto price comes with a bit of a quirk which I decided to leave to the user to determine how they want it applied. So the setting "Responsiveness" will impact the sort of aggressiveness of the RSI trend line as well as the the size of the bands. You could think of this in some ways as the OPPOSITE of the multiple setting on a Bollinger or Keltner band-- 1.0 will make for the widest band, 2.0 is the default and my preference, and you can move it up to a value of 5.0.

Here are some examples of how you could use the indicator for trade signals--










And here's my thought on the current state (as of 10/06) on indices with regards to this indicator-

2021年10月13日

版本注释

Added a feature to compare the RSI of the security you're looking at with that of a benchmark, like SPY or SPX500.

• If you are trading a stock with an RSI of, say, 80 and you are comparing it to the RSI of SPY which is at 65, your stock has more comparative strength
  
• The result would be a second line that appears below your RSI trend line
  
• This line is not enabled by default. I think with this comparative line and the bands enabled a chart can potentially get messy. I'll leave that up to the user to decide if they care for it or not
  

Here are a couple examples-

Here's the indicator with bands enabled and the new comparative strength line enabled, changed to a dark gray color


Here's the indicator with the comparative line and the bands disabled. Some thoughts on how these 2 can be used to help produce meaningful technical analysis trade signals.

2021年10月14日

版本注释

Fixed input type for benchmark symbol