RSI+STOCHRSI v2

The RSI+STOCHRSI v2 indicator is a momentum-based strategy tool that combines Relative Strength Index (RSI) levels with Stochastic RSI crossovers to identify potential trend reversals in oversold and overbought conditions.

Usage

The Usage section focuses on identifying high-probability entry points by filtering Stochastic RSI momentum with standard RSI thresholds. A long signal is generated when the Stochastic %K line crosses over the %D line while the RSI is either below the oversold level or has just crossed above it. Conversely, a short signal is triggered when the Stochastic %K line crosses under the %D line while the RSI is above the overbought level or has just crossed below it.

The script is particularly effective on lower timeframes, such as the 5-minute chart, where it can capture quick shifts in momentum. Users can adjust the RSI and Stochastic lengths to tune the sensitivity of the signals to different market conditions.

Details

The script executes logic based on two primary oscillators:

1. RSI Filter: Acts as a regime filter, ensuring that trades are only taken when the price is statistically extended (above 70 or below 20 by default).
2. Stochastic RSI Crossover: Provides the execution trigger. By applying a Stochastic calculation to RSI values, the indicator highlights the relative position of the RSI within its recent range, offering more frequent signals than standard RSI alone.

The strategy also includes a built-in time filter, allowing users to backtest or execute signals only within a specific date range defined in the settings.

Settings

vRSI Settings

• vRSI Length: The lookback period for the primary RSI used as a trend/regime filter.
• Over Sold: The threshold below which the market is considered oversold (default is 20).
• Over Bought: The threshold above which the market is considered overbought (default is 70).
• vRSI Source: The price source used for the RSI calculation (default is OHLC4).

Stoch RSI Settings

• Smooth K: The period for the Stochastic %K smoothing.
• Smooth D: The period for the Stochastic %D moving average.
• Stoch RSI Length: The RSI length used as the input for the Stochastic calculation.
• Stoch Length: The lookback period for the Stochastic calculation.
• RSI Source: The price source for the Stochastic RSI (default is Close).

Date Range

• Year/Month/Day From/Until: Defines the specific start and end dates for the strategy and alerts to be active.

FAQ

How do I interpret the signals? Signals occur when momentum (Stoch RSI) shifts in the direction of a mean reversion while the price (RSI) is in an extreme zone.

What timeframe is best for this indicator? While the script is optimized for the 5-minute chart, it can be applied to any timeframe depending on the user's trading style and parameter adjustments.

How can I access RSI+STOCHRSI v2? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.