RSI Multi Length With Divergence Alert

The RSI Multi Length With Divergence Alert indicator calculates an average RSI value derived from a range of multiple lengths while providing automated detection for classic and hidden divergences. By aggregating RSI data across various periods, this tool offers a smoothed representation of momentum and identifies overbought or oversold conditions based on the percentage of the aggregated lengths exceeding user-defined thresholds.

Usage

The tool is primarily used to identify momentum shifts and potential reversals through divergence detection. Users can observe the average RSI line, which changes color based on its position relative to dynamic overbought and oversold moving averages.

• Classic Divergences: Indicated by labels on the oscillator, these suggest potential trend reversals when price and the average RSI move in opposite directions.
• Hidden Divergences: Often used to identify trend continuation opportunities.
• RSI Meter: A visual table in the top right corner displays the percentage of RSI lengths currently in overbought or oversold territory, providing a quick snapshot of multi-period momentum.

Details

Unlike a standard RSI that uses a single period, this script iterates through a range of lengths (from Minimum to Maximum). For each length, it calculates the RSI and then averages these results to create a more robust "Average RSI." This approach reduces the noise typically found in short-period RSIs while remaining more responsive than a single long-period RSI. The divergence logic utilizes pivot points (highs and lows) to compare price action against the calculated average RSI oscillator.

Settings

RSI Setting

• Maximum Length: The upper bound of the RSI period range.
• Minimum Length: The lower bound of the RSI period range.
• Overbought Level: The horizontal threshold representing overbought conditions (default is 70).
• Oversold Level: The horizontal threshold representing oversold conditions (default is 30).
• Source: The input price data used for RSI calculations (e.g., Close, Open, HL2).

RSI Base MA Settings

• MA Type: Select the moving average type to apply to the RSI (SMA, EMA, WMA, etc.).
• MA Length: The lookback period for the RSI Base MA.

Divergence Setting

• Pivot Right: The number of bars to the right of a pivot point.
• Pivot Left: The number of bars to the left of a pivot point.
• Max Range: The maximum number of bars allowed between two points to form a divergence.
• Min Range: The minimum number of bars required between two points to form a divergence.

Display Setting

• RSI Base MA: Toggle the visibility of the RSI moving average.
• Classic/Hidden Divergences: Individual toggles to enable or disable specific divergence types (Bullish/Bearish).

FAQ

How do I interpret the RSI Meter?

The meter shows the percentage of all RSI lengths within your specified range that are currently above the overbought level or below the oversold level. High percentages indicate strong trend maturity or potential exhaustion.

What is the benefit of using multiple RSI lengths?

Using multiple lengths helps filter out "false" signals from a single timeframe by ensuring that momentum is consistent across a spectrum of periods, leading to more reliable divergence signals.

How can I access this tool?

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