RSI Supreme Multi-Method

The RSI Supreme Multi-Method indicator provides a highly customizable approach to momentum analysis by integrating four distinct calculation methods with automated divergence detection. This tool allows traders to adapt the traditional Relative Strength Index to specific market conditions such as high volatility or specific trading sessions, offering a more nuanced view of overbought and oversold states.

Usage

The Usage section focuses on how to leverage the different calculation modes and built-in signals:

• Standard Mode: Use this for traditional RSI analysis to identify basic overbought (>70) and oversold (<30) levels.
• Volatility Weighted Mode: This mode adjusts the RSI source based on market volatility, making the indicator more responsive during high-activity periods and smoother during consolidation.
• Smoothed Mode: Ideal for trend followers, this method applies an EMA to the RSI values to filter out market noise and provide clearer signals.
• Session Weighted Mode: This allows for time-based manipulation. For example, you can increase the weight of the RSI during the New York open and decrease it during the Asian session to account for varying liquidity.
• Divergence Analysis: The tool automatically plots lines when price and the oscillator disagree. Bullish divergences (price lower lows, RSI higher lows) and bearish divergences (price higher highs, RSI lower highs) can signal potential trend reversals.

Details

The indicator functions by modifying the input source or the resulting RSI value based on the selected "RSI Type." In Volatility mode, it calculates a standard deviation percentile to scale the price source. In Session mode, it checks the current chart time against user-defined session windows and applies a percentage multiplier. The divergence logic utilizes pivot points (highs/lows) and compares them against previous pivots within a specified sensitivity range.

Settings

RSI Settings

• RSI Length: The lookback period for the base RSI calculation.
• RSI Source: The price data (e.g., close, hl2) used for the calculation.
• Overbought/Oversold Values: User-defined thresholds for extreme momentum readings.
• RSI Type: Selector for the four manipulation methods (Standard, Volatility, Session, or Smoothed).

Method Specific Settings

• Volatility Length: The lookback period used for the volatility percentile calculation.
• Smoothed Length: The length of the EMA applied in the Smoothed method.
• Session Settings: Six individual blocks to define start/end times and the multiplier percentage for each window.

Divergence Settings

• Show Divergences: Toggles the visibility of divergence lines.
• Sensitivity: Determines the lookback for identifying pivot points for divergence.
• Colors/Width: Visual customization for bullish and bearish divergence lines.

FAQ

How do I interpret the colored markers on the OB/OS levels? Red/Green crosses indicate the initial entry into overbought or oversold zones, while neutral (blue) crosses indicate the condition is persisting. Orange markers signify that the RSI has exited the extreme zone.

Can I set alerts for divergences? Yes, the script includes alert conditions for both bullish and bearish divergences, as well as transitions in and out of overbought/oversold states.

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.