RSI Past Can Turn RSI Into a Directional Tool

The RSI Past indicator transforms the traditional Relative Strength Index into a directional trend tool by calculating the difference in time since the most recent overbought and oversold conditions. This approach helps traders identify the prevailing momentum and market bias beyond simple overbought or oversold extremes.

Usage

The Usage section focuses on interpreting the directional output of the script. Unlike a standard RSI that fluctuates between 0 and 100, RSI Past oscillates around a zero line:

• Bullish Bias: When the indicator is positive (above 0), it signifies that the most recent extreme was an overbought reading (e.g., RSI > 70). The reading increases the more recently an overbought condition occurred compared to an oversold one.
• Bearish Bias: When the indicator is negative (below 0), it signifies that the most recent extreme was an oversold reading (e.g., RSI < 30).
• Trend Strength: Sustained positive readings often accompany strong upward trends where price frequently reaches overbought levels, while sustained negative readings suggest heavy selling pressure and frequent oversold conditions.

Details

The RSI Past indicator functions by tracking the bar_index of the most recent occurrences where the RSI crossed above the overbought threshold or below the oversold threshold.

The core calculation is: Reading = Last Bullish Bar Index - Last Bearish Bar Index.

By subtracting the index of the last oversold event from the index of the last overbought event, the script produces a relative distance. If the overbought event is more recent (higher bar index), the result is positive. If the oversold event is more recent, the result is negative. This effectively "anchors" the RSI's momentum to its most recent significant peak or trough.

Settings

• Length: The lookback period used for the underlying RSI calculation (default is 14).
• Price: The source input for the RSI calculation (typically the Close price).
• Overbought Threshold: The level above which the RSI is considered overbought and triggers a "bullish" timestamp.
• Oversold Threshold: The level below which the RSI is considered oversold and triggers a "bearish" timestamp.
• Above 0 Color: The color assigned to the histogram/area when the trend is bullish.
• Below 0 Color: The color assigned to the histogram/area when the trend is bearish.

FAQ

How do I interpret the zero-line cross?

A cross above the zero line indicates that the price has hit an overbought level more recently than an oversold level, suggesting a shift toward bullish momentum. Conversely, a cross below zero suggests bearish momentum.

Can I change the sensitivity of the signals?

Yes, by adjusting the Length or the Overbought/Oversold Thresholds, you can make the indicator more or less sensitive to price fluctuations.

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.