RSI Div at VWAP StDev

The RSI Div at VWAP StDev indicator is a mean-reversion tool designed to identify potential intraday reversals by combining RSI divergences with price deviations from the Daily Volume Weighted Average Price (VWAP).

Usage

This script identifies short-term exhaustion points where price is extended relative to the daily mean and showing momentum divergence. A bullish signal is generated when the price is below a specific Daily VWAP standard deviation while the RSI exhibits a bullish divergence. Conversely, a bearish signal occurs when price is above a specific Daily VWAP standard deviation while the RSI exhibits a bearish divergence.

Common use cases include:

• Intraday Scalping: Identifying potential reversal points during high-volatility sessions.
• Trend Exhaustion: Spotting when a trend has pushed too far from the VWAP and momentum is fading.
• Filtering Signals: Using the VWAP standard deviation bands as a volatility filter to ensure trades are only taken at extreme price levels.

Details

The indicator calculates a Daily VWAP and its corresponding standard deviation bands starting from the beginning of each trading day. The RSI component monitors for regular (not hidden) divergences within overbought and oversold territories. A key logic feature is the "Reset Level"; once the RSI crosses this neutral threshold (typically 50), any active divergence tracking is cleared, ensuring that signals are fresh and relevant to the current swing.

Settings

• Length: Sets the lookback period for the RSI calculation.
• Oversold: Defines the RSI level considered oversold (default: 30).
• Overbought: Defines the RSI level considered overbought (default: 70).
• Bear Div Reset level: The RSI level that, when crossed, resets the bearish divergence tracking.
• Bull Div Reset level: The RSI level that, when crossed, resets the bullish divergence tracking.
• Div lookback period (bars)?: The number of bars to look back for identifying price and RSI peaks/troughs.
• Use Std Dev: Toggle to require price to be outside the VWAP standard deviation bands for a signal.
• Stdev above: Sets the multiplier for the upper Daily VWAP band.
• Stdev below: Sets the multiplier for the lower Daily VWAP band.

FAQ

How do I access RSI Div at VWAP StDev?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What is the purpose of the Reset Level?

The Reset Level prevents the indicator from signaling old divergences after the momentum has already neutralized. If the RSI returns to the midpoint (50), the previous momentum cycle is considered over.

Can I use this on any timeframe?

While it can be applied to any timeframe, it is optimized for intraday charts (e.g., 1m, 5m, 15m) because the VWAP calculation resets daily.