TP RSI

The TP RSI indicator provides an integrated trend, momentum, and volatility analysis tool by combining RSI, multi-layered moving average ribbons, and volatility bands into a single oscillator window.

Usage

The tool is designed to offer a comprehensive view of market conditions without the need for multiple indicators.

• Trend Identification: The EMA ribbon (comprising 10 MAs forming 5 color-coded bands) identifies the trend direction. A blue ribbon signifies an uptrend, while a red ribbon signifies a downtrend.
• Momentum Measurement: The RSI line is color-coded to indicate momentum strength. Blue represents upward momentum, red represents downward momentum, and white indicates a neutral state.
• Volatility Assessment: Bollinger Bands are applied directly to the RSI. Narrow bands suggest low volatility and potential breakouts, while the RSI crossing outside the bands indicates increasing momentum.
• Divergence Detection: The script automatically identifies regular and hidden divergences between price and RSI, highlighting potential reversals or trend continuations.

Details

The indicator calculates its components based on the RSI value rather than price directly for certain elements like the ribbons and Bollinger Bands. This creates a "volatility-adjusted momentum" environment where the RSI's position relative to its own volatility bands and trend ribbons provides more nuanced signals.

The "RSI Sensitivity" settings control a neutral zone around a central basis. If the RSI is within this zone, it is colored neutrally, helping traders avoid "choppy" or low-conviction signals.

Settings

RSI Settings

• Source: The price source used for RSI calculation.
• RSI Period: The lookback period for the RSI.
• RSI Sensitivity Period: Controls the width of the neutral zone.
• RSI Sensitivity Multiplier: Scales the neutral zone; higher values keep the RSI neutral longer.

Ribbon Settings

• MA Type: Select between EMA, SMA, WMA, HMA, RMA, or ALMA for the ribbon calculation.
• EMA Lengths (1-10): Individual length controls for the ten moving averages forming the ribbon.
• Ribbon Color Style: Choose between "Gradient Fade" or "Classic" visual styles.

Divergence Settings

• Show Regular/Hidden: Toggle visibility for different divergence types.
• Pivot Lookback: The number of bars used to identify pivot highs and lows for divergence detection.
• Max Lookback Range: The maximum distance between two pivots to qualify as a divergence.

Bollinger Band Settings

• BB Period: The lookback period for the volatility bands.
• BB Multiplier: The standard deviation multiplier for the bands.

FAQ

How do I interpret the colors of the RSI? Blue indicates bullish momentum, red indicates bearish momentum, and white (neutral) suggests the RSI is within a calculated volatility-adjusted neutral zone.

What constitutes a strong trend signal? A strong trend is often identified when the ribbon is fully colored (e.g., all blue) and the RSI is being rejected by the ribbon's outer edges while staying outside the neutral zone.

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