RSI (+Ichimoku Cloud)

The RSI (+Ichimoku Cloud) indicator provides a multi-layered momentum analysis by combining RSI candle visualizations, linear regression channels, and Ichimoku cloud components to identify trend shifts and exhaustion points. By integrating these tools, it offers a comprehensive view of support and resistance levels directly within the RSI oscillator space.

Usage

The script can be used to identify trend reversals and momentum exhaustion through several visual cues:

• RSI Candles: The RSI is plotted as candles with wicks, making it easier to visualize price-like action and candlestick patterns within the oscillator.
• Linear Regression Channel: A channel is projected over the RSI to identify overextended momentum. When RSI candles reach the channel boundaries, they often act as dynamic support or resistance.
• Divergence Signals: The indicator automatically identifies and plots bullish and bearish divergences between price and the RSI, serving as a confirmation for potential trend changes.
• Ichimoku Cloud integration: By applying Ichimoku components (Senkou Span A and B) to the RSI values, users can observe "momentum clouds" that help predict future trend directions and areas of oscillator-based support/resistance.

Details

This script transforms the standard Relative Strength Index into a more readable "candle" format. The addition of linear regression uses a statistical approach to define the "normal" range of RSI movement for a given period, highlighting deviations. The Ichimoku Cloud integration is unique as it uses the RSI values as inputs for the Leading Spans, creating a momentum-based cloud that precedes current RSI action to forecast trend stability.

Settings

RSI

• How many Right/Left Bars for Pivots: Determines the sensitivity for detecting pivot highs and lows used in divergence calculation.
• Pivot Source for Bear/Bull Divs: The price source used to compare against RSI for divergence.
• RSI Length: The lookback period for the standard RSI calculation.
• Lookback Level for Divs: Adjusts how many historical pivots are evaluated for divergence signals.

Linear Regression

• Linear Regression On/Off: Toggles the visibility of the regression channel.
• Trend Period: The lookback period used for the linear regression calculation.
• Deviation: Sets the width of the channel based on standard deviations.
• Estimator: Choose between Biased or Unbiased statistical estimators.

Ichimoku

• Conversion Line Periods: The period for the Tenkan-sen calculation.
• Base Line Periods: The period for the Kijun-sen calculation.
• Lagging Span 2 Periods: The period for the Senkou Span B.
• Displacement: The number of bars to shift the cloud forward.

FAQ

How do I access RSI (+Ichimoku Cloud)?

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

What do the divergence lines indicate?

Green lines represent bullish divergence (lower price lows with higher RSI lows), while red lines represent bearish divergence (higher price highs with lower RSI highs).

Can I change the channel width?

Yes, the "Deviation" setting in the Linear Regression group allows you to expand or contract the channel to suit different volatility levels.