[blackcat] L3 Inverted VixFix Indicator with RSI Scaling

This pine script that creates a custom indicator called the Inverted VixFix Indicator with RSI Scaling. This indicator combines two well-known technical indicators - the VixFix and the RSI - to create a more comprehensive view of market conditions.

The VixFix is a technical indicator that helps identify market trends and volatility. It is based on the highest close of the past 22 bars and the lowest low of the same period. The VixFix is calculated as 100 times the difference between the highest close and the current low divided by the highest close. The indicator is inverted, meaning that high values indicate low volatility and low values indicate high volatility.

The RSI (Relative Strength Index) is a momentum indicator that measures the strength of price action in a given period. It is calculated based on the closing prices of the selected asset. The RSI is scaled to a range between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions.

The Inverted VixFix Indicator with RSI Scaling combines these two indicators to give a more comprehensive view of market conditions. The RSI is first scaled to a range between 0 and 100 using the RSI Length, RSI Overbought, and RSI Oversold inputs. The Inverted VixFix is then scaled to the same range as the RSI using the RSI Overbought and RSI Oversold inputs. The two indicators are then combined to create the Inverted VixFix Indicator with RSI Scaling.

To smooth out the RSI, the script also uses the ALMA (Arnaud Legoux Moving Average) function. This function is a type of moving average that uses a variable smoothing factor to give more weight to recent price action. In this script, the ALMA is applied to the scaled RSI with a length of 3, a offset of 0.58, and a sigma of 6.

To help visualize the indicator, the script also creates visual elements such as threshold lines and fills. The Bull Threshold line is drawn at the RSI Overbought level and the Bear Threshold line is drawn at the RSI Oversold level. A fill is then created between these two lines using the color purple and opacity set to 70%.

Overall, the Inverted VixFix Indicator with RSI Scaling is a useful tool for traders looking for a more comprehensive view of market conditions. By combining the VixFix and RSI indicators, this script provides a more nuanced view of market trends and volatility.