Candlesticked RSI

The Candlesticked RSI indicator provides a visual representation of the Relative Strength Index using various candle styles to help price action traders identify true momentum and market noise. By applying RSI calculations to the open, high, low, and close values of price, this tool allows for a more detailed analysis of momentum trends compared to a standard single-line RSI.

Usage

The tool can be used to identify trend exhaustion and reversals through smoothed candle patterns within the RSI oscillator. Traders can look for traditional RSI signals like overbought (above 70/80) or oversold (below 30/20) conditions, but with the added benefit of candle formations that reveal intra-period momentum.

The script features a built-in divergence detector that identifies discrepancies between price action and momentum. When a divergence is found, it is plotted directly on the oscillator with arrows and trendlines. Users can switch between several chart types, including standard Candles, Hollow Candles, and "Siwi Candles," which adjust wick proportions for better clarity.

Details

The indicator calculates the RSI for the Open, High, Low, and Close prices independently. These values are then smoothed using a Simple Moving Average (SMA) to reduce noise. The resulting values are used to construct the candlestick-style display.

The "Siwi Candles" implementation is a unique construction method that recalculates high and low points based on the net difference between upper and lower wicks, aiming to provide a more balanced view of price movement. The divergence detection logic uses pivot points (pivothigh/pivotlow) and compares them against price extremes over a user-defined lookback period.

Settings

RSI and Smoothing

• Length: The period used for the RSI calculation.
• Smooth: The SMA period applied to the RSI values to filter out market noise.

Divergences

• Display divergences: Enables or disables the visual plotting of bullish and bearish divergences.
• Pivot right bars: Number of bars to the right of a pivot point.
• Pivot left bars: Number of bars to the left of a pivot point.
• Lookback length: The maximum number of bars to look back for identifying a prior pivot.
• 1st pivot of bearish/bullish div: Threshold settings for the initial pivot level to qualify a divergence.

Visuals

• Chart type: Selects the visual style (Candles, Hollow Candles, Siwi Candles, HL Bar, or Line).
• Color Settings: Customizable colors for ascending and descending candle bodies, borders, and wicks.
• Price line: Displays a horizontal line at the current RSI level.

FAQ

How do I interpret Siwi Candles on this indicator?

Siwi Candles are a modified visual representation designed to highlight the net momentum by comparing wick sizes. If the closing momentum is significantly stronger than the opening, the candle structure reflects that imbalance.

What do the different horizontal zones represent?

The zones at 70/80 and 30/20 represent standard and extreme overbought/oversold levels. Crosses into these regions can signal potential trend reversals or strength depending on the context.

How can I access Candlesticked RSI?

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