MOST on RSI

The MOST on RSI indicator provides a trend-following mechanism applied directly to the Relative Strength Index (RSI), utilizing a moving average and a trailing percentage stop to identify momentum shifts and potential trend reversals.

Usage

The Usage section describes how the script can be used to identify trend changes and market momentum. The indicator generates signals based on the interaction between a Moving Average (MA) calculated from the RSI and the MOST (Moving Stop Loss) line.

• Buy Signal: Occurs when the RSI-based Moving Average crosses above the MOST line.
• Sell Signal: Occurs when the RSI-based Moving Average crosses below the MOST line.
• Trend Confirmation: A bullish trend is indicated when the Moving Average remains above the MOST line, while a bearish trend is indicated when it remains below.

The indicator also includes a divergence detection system. Users can identify "Bullish" and "Bearish" divergences between price action and the RSI oscillator to spot potential exhaustion points in the current trend. Additionally, the Bollinger Bands option allows for volatility analysis within the RSI window.

Details

The script applies the MOST (Moving Stop Loss) logic, originally developed by Anıl Özekşi, to the RSI rather than price data. It calculates a chosen Moving Average of the RSI and then derives a trailing stop-loss level based on a user-defined percentage.

The script supports multiple Moving Average types for the MOST calculation:

• SMA: Simple Moving Average
• EMA: Exponential Moving Average
• SMMA (RMA): Smoothed Moving Average
• WMA: Weighted Moving Average
• VWMA: Volume Weighted Moving Average
• VAR (VIDYA): Variable Index Dynamic Moving Average

Adjusting the MA length and the stop loss percentage affects signal frequency; higher values result in fewer, delayed signals (filtering noise), while lower values produce more frequent, faster signals.

Settings

RSI Settings

• RSI Length: Sets the period for the RSI calculation.
• Source: Determines the price data used for the RSI.
• Show Divergence: Enables or disables the visual plotting of bullish and bearish divergences.

MOST Settings

• MA Type: Selects the moving average method used for the MOST calculation (SMA, Bollinger Bands, EMA, SMMA, WMA, VWMA, or VAR).
• MA Length: Sets the period for the chosen Moving Average.
• STOP LOSS Percent: Determines the percentage distance for the trailing stop-loss line.
• BB StdDev: Sets the standard deviation multiplier when the MA Type is set to Bollinger Bands.

Display Settings

• Show Signals?: Toggles the visibility of "BUY" and "SELL" labels on the chart.

FAQ

How do I interpret the divergence labels? Divergence labels appear when there is a discrepancy between price lows/highs and RSI lows/highs. A Bullish label indicates price made a lower low while RSI made a higher low, suggesting upward momentum.

What is the benefit of using the VAR (VIDYA) setting? The VAR (Variable Index Dynamic Moving Average) adjusts its sensitivity based on market volatility, which can be particularly useful for filtering noise during sideways or choppy market conditions.

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