Relative Strength Index + Candle coloring
Relative Strength Index (RSI)
>The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100.
>Traditionally the RSI is considered overbought when above 70 and oversold when below 30. But blindly selling at 70 and buying at 30 is a bad idea because price can make very low movement while oscillator makes large moves and vice versa.
>In RSI Signals can be generated by looking for divergences and failure swings. RSI can also be used to identify the general trend.
>Calculation
The RSI is a fairly simple formula, The basic formula is:
RSI = 100 –
>In this script I have used the standard 14 period RSI and added candle coloring feature, I used two other periods other than 14 to determine the major trend and use the position of 14 period RSI relative to other 2 periods to color the candle.
>color reference, what they represent :
>also look out for divergences, its not included in this script will provide in next updates, divergence are HH on price but LH on RSI, LL on price but LH on RSI, easy to identify. the best divergences are often easy to find they occur within next 5-10 candles, do not overcomplicate when it doesn't exist.
How to use this candle coloring:
>best during major trends.
>not best for mean reversion plays.
>use it as an addition to your system.
>The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100.
>Traditionally the RSI is considered overbought when above 70 and oversold when below 30. But blindly selling at 70 and buying at 30 is a bad idea because price can make very low movement while oscillator makes large moves and vice versa.
>In RSI Signals can be generated by looking for divergences and failure swings. RSI can also be used to identify the general trend.
>Calculation
The RSI is a fairly simple formula, The basic formula is:
RSI = 100 –
>In this script I have used the standard 14 period RSI and added candle coloring feature, I used two other periods other than 14 to determine the major trend and use the position of 14 period RSI relative to other 2 periods to color the candle.
>color reference, what they represent :
>also look out for divergences, its not included in this script will provide in next updates, divergence are HH on price but LH on RSI, LL on price but LH on RSI, easy to identify. the best divergences are often easy to find they occur within next 5-10 candles, do not overcomplicate when it doesn't exist.
How to use this candle coloring:
>best during major trends.
>not best for mean reversion plays.
>use it as an addition to your system.
Release Notes:
> Removed mid line and plotted other 2 period RSI
> mid line not required since other 2 RSI act as dynamic Support/Resistance
>example
>Added 80,20 horizontals with color.
note:
>turn off borders
>or make both border black
>change colors for dark mode
;
> mid line not required since other 2 RSI act as dynamic Support/Resistance
>example
note:
>turn off borders
>or make both border black
>change colors for dark mode
;