MF RSI

The MF RSI indicator provides a comprehensive momentum and volume-based analysis tool that combines the Relative Strength Index (RSI) and Money Flow Index (MFI) to identify price/oscillator divergences and exhaustion levels.

Usage

The tool is primarily used to identify trend reversals and continuations through momentum shifts. By overlaying the RSI and MFI, traders can observe how price momentum relates to volume-weighted price movement.

• Divergence Signals: The script automatically detects and labels Regular and Hidden bullish/bearish divergences. Regular divergences often suggest a potential trend reversal, while hidden divergences typically indicate trend continuation.
• Oscillator Crosses: Small circles at the top and bottom of the pane indicate crossovers between the RSI and MFI, signaling shifts in relative momentum.
• Exhaustion Levels: Labels marked "H" (High) or "L" (Low) appear when both oscillators enter overbought (>70) or oversold (<30) territory simultaneously, highlighting extreme market conditions.
• Visual Ribbon: The area between the RSI and MFI is filled with color (Red when MFI > RSI, Green when RSI > MFI), providing a quick visual reference for which oscillator is leading.

Details

The script calculates the standard RSI and MFI over user-defined periods. It utilizes a pivot-based lookback mechanism to identify peaks and troughs in the oscillator and price action to determine divergence.

Key technical components include:

• Pivot Lookback: Uses left and right strength to confirm structural highs and lows.
• Divergence Logic: Compares price action (higher highs/lower lows) against oscillator movement within a specific bar range to filter out noise.
• Overlap Analysis: By tracking the relationship between a momentum oscillator (RSI) and a volume-weighted oscillator (MFI), the script identifies whether price moves are supported by volume.

Settings

• Overbought: Sets the upper threshold level (default 70).
• Oversold: Sets the lower threshold level (default 30).
• RSI Period: The length used for the RSI calculation.
• RSI Source: The price source for the RSI (e.g., Close).
• MF Period: The length used for the MFI calculation.
• MF Source: The price source for the MFI calculation.
• Pivot Lookback Right/Left: Determines the number of bars required to confirm a pivot point for divergence detection.
• Max/Min of Lookback Range: Defines the bar window in which the script looks for previous pivots to compare for divergence.
• Plotting Toggles: Allows users to enable or disable specific divergence types (Regular Bullish, Hidden Bullish, Regular Bearish, Hidden Bearish) on the chart.

FAQ

How do I interpret the "H" and "L" labels?

The "H" label indicates an overbought condition where both RSI and MFI are above the threshold, while the "L" label indicates an oversold condition where both are below the threshold. These serve as potential exhaustion signals.

What is the difference between Regular and Hidden Divergence?

Regular divergence occurs when the oscillator fails to confirm a new price high or low, suggesting a reversal. Hidden divergence occurs when the price fails to confirm a new oscillator high or low, suggesting the current trend may continue.

How can I access the MF RSI?

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