RSI Swing Signal - Chart

The RSI Swing Signal - Chart indicator identifies potential price reversals by combining Relative Strength Index (RSI) exhaustion levels with swing high/low price action and candlestick patterns. It provides traders with clear on-chart visual signals for entries, stop losses, and take-profit targets based on volatility and mathematical reward-to-risk ratios.

Usage

The indicator identifies reversal points when the RSI enters overbought (above 80) or oversold (below 20) territory. It specifically looks for bullish or bearish engulfing patterns that coincide with a recent swing high or low within a specified lookback period.

When a valid signal is detected:

• Bullish Signal: A green triangle appears below the bar. The script projects a green target line and a red stop loss line based on the recent low and the ATR-based stop setting.
• Bearish Signal: A red triangle appears above the bar. The script projects a green target line and a red stop loss line based on the recent high.
• Break-Even (B/E): If enabled, a blue line indicates the price level where the trade reaches a specific reward-to-risk ratio, often used by traders to move stops to break-even.

Details

This tool is designed to work as a companion to an RSI oscillator, moving the logic directly onto the price chart for better execution. It uses a dynamic stop-loss calculation that can either be a direct multiplier of the Average True Range (ATR) or a tiered "ATR Stop Loss Algorithm" (EAP). The EAP algorithm adjusts the pip-count of the stop loss based on the current volatility regime (e.g., higher pips for higher ATR values), providing a more robust approach to risk management across different market conditions.

Settings

Trade Settings

• Stop Loss Size (x ATR): Sets the multiplier for the ATR-based stop loss distance.
• Reward:Risk Ratio: Determines the distance of the profit target relative to the stop loss distance.
• Reward To Risk Ratio (B/E): Sets the level at which the break-even line is plotted.
• Show B/E Point: Toggles the visibility of the blue break-even line.
• Use ATR Stop Loss Algorithm: When enabled, uses a predefined tiered pip-based stop loss instead of a simple ATR multiplier.

Indicator Settings

• Lookback: The number of bars used to determine the recent swing high or swing low.
• RSI Overbought Level: The threshold for bearish exhaustion signals.
• RSI Oversold Level: The threshold for bullish exhaustion signals.
• RSI Length: The period used for the internal RSI calculation.
• Draw Signals On Real-Time Bars: Controls whether signals appear on the current live candle or only on closed bars.

FAQ

How do I use the ATR Stop Loss Algorithm? Enable the "Use ATR Stop Loss Algorithm" in the settings. This uses a tiered system where the stop size is automatically determined by the current ATR value (e.g., 20 pips if ATR < 30, up to 100 pips if ATR > 100).

Can I set alerts for these signals? Yes, the script includes alert conditions for both long and short signals, which can be configured through the TradingView Alert menu.

How can I access the RSI Swing Signal - Chart? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.