Heikin Ashi RSI Oscillator

The Heikin Ashi RSI Oscillator indicator transforms the Relative Strength Index (RSI) into a Heikin Ashi candle format to provide a smoother, trend-oriented view of momentum while reducing market noise.

Usage

The Usage section describes how the script can be used to identify trend direction and momentum shifts. By visualizing RSI values as Heikin Ashi candles, traders can more easily distinguish between minor fluctuations and significant trend changes.

• Trend Identification: Green candles typically indicate bullish momentum, while red candles indicate bearish momentum. The smoothing effect helps traders stay in trends longer by filtering out RSI volatility.
• Overbought/Oversold Conditions: The indicator includes customizable horizontal boundaries (OB/OS). When the candles or the RSI plot reach these extremes, it suggests potential exhaustion in the current trend.
• RSI & Stochastic Overlays: Users can toggle a standard RSI line or a Stochastic RSI ribbon to look for convergences or crossovers that confirm the price action shown by the Heikin Ashi candles.

Details

The script calculates Heikin Ashi candles derived entirely from RSI values rather than price. It uses the standard RSI formula for the "Close" and then applies the Heikin Ashi technique to generate Open, High, and Low values within the oscillator pane.

A unique feature is the "Open Smoothing" calculation, which allows users to increase the bias toward the prior open value. This helps in providing a clearer visualization of trend strength but may slightly distort the High and Low wick values. Because this is a real-time indicator, it is recommended to use the "once-per-bar-close" setting for alerts to ensure signal validity.

Settings

Config » HARSI Candles

• Length: The lookback period for the RSI calculations used to generate the candles.
• Open Smoothing: Adjusts the bias toward the previous candle's open to further smooth the oscillator.
• Colour Palette: Customizable colors for bullish candles, bearish candles, and wicks.

Config » RSI Plot

• Source: The price data source used for the RSI calculations (e.g., OHLC4).
• Length: The period for the optional RSI line overlay.
• Smoothed Mode RSI: Applies a smoothing moving average to the RSI line.
• Show RSI Plot/Histogram: Toggles the visibility of the RSI line and the background histogram.

Config » Stochastic RSI Plot

• Show Stochastic: Toggles the Stochastic RSI calculation.
• Ribbon: Displays the Stochastic K and D lines as a filled ribbon.
• Smoothing K/D: Smoothing periods for the Stochastic components.
• Stochastic Length: The lookback period for the Stochastic calculation.
• Stoch Scaling %: Adjusts the vertical scale of the Stochastic plot to prevent it from overlapping other elements excessively.

Config » OB/OS Boundaries

• OB / OB Extreme: Sets the upper threshold levels for overbought conditions.
• OS / OS Extreme: Sets the lower threshold levels for oversold conditions.

FAQ

How do I interpret the candle colors in the oscillator? Green candles signify that the RSI-based Heikin Ashi "Close" is higher than its "Open," suggesting bullish momentum. Red candles signify the opposite, suggesting bearish momentum.

Why does the RSI line look different from the candles? The RSI line uses its own independent length setting and optional smoothing mode, whereas the candles are calculated using the HARSI period and specific Heikin Ashi averaging.

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