RSI, Volume, MACD, EMA Combo

The RSI, Volume, MACD, EMA Combo indicator provides a comprehensive trading system that integrates momentum, trend, and volume filters to identify high-probability trade entries.

Usage

The RSI, Volume, MACD, EMA Combo can be used to identify trend reversals and continuations by requiring confluence between multiple technical factors.

Long Conditions:

• Momentum: RSI is above the 50 level (bullish).
• Crossover: MACD line is above the Signal line.
• Trend: Price is trading above the 200-period EMA.
• Volume: Current volume is higher than its 20-period Simple Moving Average (SMA).

Short Conditions:

• Momentum: RSI is below the 50 level (bearish).
• Crossover: MACD line is below the Signal line.
• Trend: Price is trading below the 200-period EMA.
• Volume: Current volume is higher than its 20-period Simple Moving Average (SMA).

Exits are triggered when the RSI crosses back over the 50 level (crossunder for longs, crossover for shorts), signaling a potential loss in momentum.

Details

This tool leverages four distinct analytical pillars to reduce market noise:

1. Exponential Moving Average (EMA): Functions as the primary trend filter. Only trades in the direction of the long-term trend are considered.
2. Relative Strength Index (RSI): Acts as a momentum oscillator. The 50-level threshold is used to ensure the price has sufficient directional strength.
3. MACD: Provides a secondary momentum confirmation through the interaction of fast and slow moving averages.
4. Volume Filter: Requires participation to be above the average (SMA) to confirm that price movements are backed by market interest, helping to avoid "trap" moves in low-liquidity environments.

Settings

• EMA LENGTH: Sets the period for the trend-filtering Exponential Moving Average (default is 200).
• RSI LENGTH: Sets the lookback period for the RSI calculation (default is 14).
• OB (Overbought): Defines the upper momentum threshold for long entries (default is 50).
• OS (Oversold): Defines the lower momentum threshold for short entries (default is 50).
• MACD SLOW LENGTH: The period for the slower MACD EMA (default is 26).
• MACD FAST LENGTH: The period for the faster MACD EMA (default is 12).
• MACD SIGNAL LENGTH: The period for the MACD Signal line smoothing (default is 9).
• SMA LENGTH: The lookback period for the Volume Simple Moving Average used as a participation filter (default is 20).

FAQ

How do I use this for scalping? The strategy is frequently applied to the 1-minute timeframe for scalping, though the parameters can be adjusted to suit higher timeframes for swing trading.

Can I change the trend filter? Yes, by adjusting the EMA Length setting, you can change the sensitivity of the trend filter to suit different market conditions.

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