RSI Convergence Divergence

1月6日

RSI based oscillator inspired by the MACD.

Indicator that consists of two RSI calibrated at different lengths to take advantage of their convergence, divergence, overall direction, overall strength and several other metrics to extract signals from the price action.

This indicator includes:

- Fast RSI
- Slow RSI
- Signal line to identify convergence/divergence
- Simple moving average applied to the average of the two RSI
- DEMA applied to the average of the two RSI
- An average moving average of the SMA and DEMA

Some of the applications of this indicator:

- Simple convergence/divergence signaled by the moving average going above or below zero.
- Crossover between SMA and DEMA
- Combination of convergence/divergence and one of the 3 MAs reaching overbought or oversold threshold
- Average moving average going above or below 50

The combinations of different conditions are countless and limited only by the imagination of the user.

The visualization inputs, besides allowing to choose the candle coloring, give the user the ability to keep the chart clean and only see the signals he is interested into.

1月7日

版本注释

Added custom thresholds to clean the signals for high volatile assets.

1月14日

版本注释

Functionality Breakdown

This indicator's aim is to provide fast entries and exits typical of an oscillator, while still retaining a clean signal and resist noise.

It does that by using a fast RSI with a shorter length as a scout for early price movement and momentum, and couples it with a slower RSI with longer length to provide a bench to the set fast RSI signal against, thus putting the fast and otherwise extremely noisy signal of the fast RSI into a broader context that allows to filter through quality fast entries and exits, and false signals.

All this is enhanced by several kinds of moving averages to give the user the ability to visualize useful information that can be used to extract additional signals, and improve the overall performance.
On the indicator page the user will not only see the two RSI, but will be able to display the convergence or divergence value between the two to asses the strength and momentum of the fast movement relative to its slow benchmark.
The user will also be able to plot two different moving averages, a DEMA and a SMA, calculated on the average of the two RSI to asses the average momentum, and use their crossover as a signal.
Lastly, the two moving averages are again averaged together to give a comprehensive position and direction of the overall signal.

WARNING

This indicator can be really noisy depending on the settings and should be used preferably as a part of a strategy or more comprehensive system, not as a stand alone indicator.
No single indicator should be used alone when making investment decisions.