RSRS (Resistance Support Relative Strength)

The RSRS (Resistance Support Relative Strength) indicator evaluates market strength by measuring the relationship between periodic highs and lows through linear regression to generate momentum-based trading signals.

Usage

The Usage section describes how the script can be used to identify market transitions and trend strength. Traders can monitor the Z-Score of the RSRS value to determine if the current market momentum is significantly deviating from its historical average.

• Buy Signals: A buy signal is typically triggered when the RSRS Z-Score crosses above the preset positive threshold (e.g., 0.7). This indicates that the slope of the high/low relationship is steepening, suggesting increasing bullish strength.
• Sell Signals: A sell signal is triggered when the RSRS Z-Score crosses below the negative threshold (e.g., -0.7). This suggests a weakening market structure where the support/resistance relationship is flattening or declining.
• Neutral Zone: When the Z-Score remains between the upper and lower thresholds, the market is considered to be in a consolidation phase or lacking a clear directional bias.

Details

The RSRS indicator is based on the principle that daily highs and lows represent resistance and support levels. By applying Ordinary Least Squares (OLS) regression to these points (high = alpha + beta * low), the script extracts the "beta" or slope. A higher beta value implies that resistance levels are rising faster than support levels, indicating strength.

To make this value actionable across different market conditions, the script calculates a Z-Score of the beta over a long lookback period (typically 600 bars). This standardizes the output, allowing traders to see how current "relative strength" compares to historical norms.

Settings

• Linear Regression Window Size: Sets the number of bars used to calculate the slope (beta) of the high/low relationship.
• Z-Score Window Size: Determines the lookback period used to calculate the mean and standard deviation for the Z-Score normalization.
• Buy / Sell Threshold: Defines the deviation level required to trigger signals. Higher values result in fewer, more selective signals.
• Buy Color: The color used for the indicator line when bullish conditions are met.
• Sell Color: The color used for the indicator line when bearish conditions are met.

FAQ

How do I access the RSRS (Resistance Support Relative Strength) indicator?

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

What is the primary difference between RSRS and standard RSI?

While RSI measures price change velocity, RSRS specifically analyzes the structural relationship between high and low prices (support/resistance) using linear regression.

What timeframes are best for this indicator?

While popular in quantitative daily stock trading, the RSRS is mathematically versatile and can be applied to any timeframe; however, the Z-Score window should be adjusted to capture enough historical data for statistical significance.