Waldo RSI :o

Jan 23

Waldo RSI :o Indicator Guide

The Waldo RSI :o indicator is designed to complement the "Waldo RSI Overlay :o" by providing an RSI-based analysis on TradingView, focusing on macro shifts in market trends. Here's a comprehensive guide on how to use this indicator:

Key Features:

RSI Settings:

RSI Source: Choose from ON RSI, ON HIGH, ON LOW, ON CLOSE, or ON OPEN to determine how RSI calculates pivots.

RSI Settings:

Source: Default is (H+L)/2, but you can select any price for RSI calculation.

Length: Default RSI length is 7, which can be adjusted for sensitivity.

Trend Lines:

Show Trend Lines: Option to display trend lines based on RSI pivot points.

Zigzag Length: Determines pivot point sensitivity.

Confirm Length: Validates pivot points (default is 3).

Colors: Customize colors for Higher Highs (HH), Lower Highs (LH), Higher Lows (HL), and Lower Lows (LL) on the RSI.

Label Size and Line Width: Adjust the appearance of labels and lines.

Divergences:

Classic Divergences:

Show Classic Div: Toggle to reveal divergences where RSI and price move in opposite directions.

Colors: Set different colors for bullish and bearish divergence indicators.

Transparency and Line Width: Control the visual impact of divergence signals.

Hidden Divergences:

Similar settings for identifying hidden divergences, suggest trend continuation.


Breakout/Breakdown:

Show Breakout/Breakdown: Generates signals for RSI breakouts or breakdowns, used by "Waldo RSI Overlay :o" for visual chart signals.

Overbought/Oversold Zones:

Show Overbought and OverSold Zones: Highlights when RSI goes above 70 (overbought) or below 30 (oversold).

Moving Averages on RSI:

The default Moving Average (MA) settings are tailored to capture macro shifts in market trends:

Show Moving Averages: Option to overlay two MAs on the RSI for trend confirmation:

Fast RSI MA:

RSI Period: 50 (this is the period over which the RSI is calculated).

MA Length: 50 (the number of periods used for the moving average of the RSI).

Slow RSI MA:

RSI Period: 50 (same as fast for consistency in RSI calculation).

MA Length: 200 (longer term for capturing broader trends).

Crossover Signals: The RSI changes color from red to green based on these moving average crossovers:

When the Fast MA (50 period) crosses above the Slow MA (200 period), the RSI turns green, indicating potential bullish conditions or momentum shift.

Conversely, when the Fast MA crosses below the Slow MA, the RSI turns red, suggesting bearish conditions or a shift back towards a downtrend.

This 50-period RSI crossover setting is used to identify overall macro shifts in the market, providing a clear visual cue for traders looking at longer-term trends.

Ghost Lines (Optional):

Ghost Lines: Option to limit how far RSI trend lines extend, helping to keep the chart less cluttered.

How to Use the Indicator:

Setup:

Configure RSI by choosing the source and setting the length to match your trading style.

Set the zigzag and confirm lengths for appropriate pivot detection.

Trend Analysis:

Monitor the RSI for trend changes using the colored trend lines and labels.

Divergence Detection:

Look for RSI and price divergences to anticipate potential reversals or continuations.

Breakout/Breakdown:

Use these signals in conjunction with "Waldo RSI Overlay :o" for price action confirmation.

Overbought/Oversold:

Identify when the market might be due for a correction or continued momentum.
Moving Averages:

Focus on the color changes in RSI to understand macro trend shifts with the default 50/200 period setup.

Ghost Lines:

Enable for a cleaner chart if you don't need trend lines extending indefinitely.

Usage Tips:

Combine with other indicators for confirmation, as no single tool is foolproof.
Adjust settings to suit different market conditions or trading timeframes.
Use in tandem with "Waldo RSI Overlay :o" for a full trading signal system.

Remember, trading involves significant risk, and historical data does not guarantee future performance. Use this indicator as part of a broader trading strategy.

Jan 28

Release Notes

I updated the V2 option to calculate the high and low "hl2" prices. Small fix

Jan 31

Release Notes

Updated the v2 options.

Feb 7

Release Notes

I made small changes to the src, RSI length, zlen length, and the moving average color scheme to match the companion indicator "Waldo RSI Overlay"; most of these changes can be adjusted and optimized through the input settings.

Feb 8

Release Notes

Optimized the RSI, The Indicator was using two different RSI settings and reduced to one to help the indicator.

Feb 8

Release Notes

I forgot to make this change; I just made the indicator's default settings the same as the campaign indicator.

howMA = input.bool(true, title="Show Moving Averages", group="MA Settings")
rsiLengthInput1 = input.int(50, minval=1, title="RSI Length", group="MA Settings")
rsiLengthInput2 = input.int(50, title="RSI Fast MA Length", group="MA Settings")
rsiLengthInput3 = input.int(200, title="RSI Slow MA Length", group="MA Settings")

// New inputs for RSI overbought and oversold levels
overboughtLevel = input.int(70, title="RSI Overbought Level", minval=50, maxval=100, group="MA Settings")
oversoldLevel = input.int(44, title="RSI Oversold Level", minval=0, maxval=50, group="MA Settings")

// New inputs for MA lengths
ma1Length = input.int(16, title="Price Fast MA Length", minval=1, maxval=500, group="MA Settings")
ma2Length = input.int(66, title="Price Slow MA Length", minval=1, maxval=500, group="MA Settings")

Feb 14

Release Notes

Updated TradingView Description:

Crossover Logic for Market Sentiment:

The script now employs a sophisticated method to determine market sentiment through crossovers:

When the Fast Moving Average (ma1) crosses over the Slow Moving Average (ma2), the script sets isPriceBullish to true, indicating a bullish market condition, and isPriceBearish to false. Conversely, if ma1 crosses under ma2, isPriceBullish becomes false and isPriceBearish is set to true, signaling a bearish market condition.

Similarly, for the RSI Moving Averages, if the Fast RSI MA (rsiMA) calculated over a 50-period length crosses above the Slow RSI MA (rsiMA2) over a 200-period length, isRSIBullish is set to true and isRSIBearish to false, suggesting bullish momentum in the RSI. If rsiMA crosses below rsiMA2, isRSIBullish is false and isRSIBearish turns true, indicating bearish momentum.

Color Scheme Aligned with RSI Indicator:

To enhance visual consistency with the companion RSI indicator ("Waldo RSI :2025"), the color scheme for the Bollinger Bands cloud has been updated:

BullishColor: Green, used when both price and RSI conditions are bullish, indicating potential upward momentum.

BearishColor: Orange, applied when both price and RSI suggest a bearish trend, signaling potential downward movement. This color represents a warning of potential downward price action, often used to highlight areas where traders might consider short positions or exiting long positions.

NeutralColor: Grey, for situations where neither bullish nor bearish conditions are clearly defined.

OverboughtColor: Purple, for when the RSI is above the overbought level, highlighting potential for a price pullback.

OversoldColor: Blue, when the RSI falls below the oversold level, suggesting a possible price recovery.

Under50Color: Red, when the RSI is below 50, indicating general bearish sentiment or weakening bullish momentum.

Overbought/Oversold (OB/OS) Conditions:

The Overbought and Oversold conditions are determined using a 14-period RSI (rsi2). Specifically, if the 14-period RSI is above 70, it's considered overbought, and if it's below 30, it's considered oversold. These conditions dictate when the cloud turns purple or blue, respectively.

General RSI Settings:

The rest of the script, including the dynamic Bollinger Bands color logic for other conditions, operates off a 50-period RSI (rsi1). This longer timeframe offers a broader perspective on market momentum, smoothing out short-term fluctuations for a clearer trend analysis.

The color of the cloud between the Bollinger Bands is dynamically determined based on the following conditions:

If the 14-period RSI (rsi2) is above the overbought level (overboughtLevel), the cloud turns purple.
If the 14-period RSI is below the oversold level (oversoldLevel), the cloud color changes to blue.
When the 50-period RSI (rsi1) is less than 50, the cloud is colored red, showing a general bearish or neutral sentiment.
In bullish market conditions, where both price and RSI are bullish (isPriceBullish and isRSIBullish are true), and the price (srcWaldo) is above the slow MA (ma2), the cloud is green.
For bearish conditions, where both price and RSI are bearish (isPriceBearish and isRSIBearish are true), and the price is below ma2, the cloud turns orange.
If none of these specific conditions are met, the cloud defaults to a neutral grey.

This updated color logic, along with the dual RSI period approach, ensures that the visual representation of the Waldo Momentum Cloud Bollinger Bands closely aligns with the sentiment and momentum insights provided by the RSI, offering traders a more integrated view of market conditions across different timeframes and indicators.

This description provides a comprehensive overview, correcting the application of the 14-period RSI for OB/OS conditions while maintaining the use of the 50-period RSI for other aspects of the script's logic

Feb 14

Release Notes

Optimizing color conditions

Feb 14

Release Notes

Added a drop-down for Trend type.