+ True RSI

The + True RSI indicator is a specialized momentum tool that refines standard RSI calculations to provide a cleaner, more responsive signal for trend identification and extremity analysis. It features integrated smoothing options, dual-timeframe color referencing, and a comprehensive suite of moving averages to filter market noise and highlight potential reversals.

Usage

The + True RSI can be used as a primary oscillator to identify overbought and oversold conditions or as a trend-following tool when utilizing the smoothed RSI and signal line crossovers.

• Indicator Smoothing: By enabling the smoothed version, users can replace the standard jagged RSI line with a more fluid representation using various moving average types (e.g., Jurik, ALMA, or Kaufman), reducing false signals in ranging markets.
• Color Referencing: The indicator can dynamically color the RSI line and chart bars based on several logic types:
  • Range: Traditional coloring based on the Upper and Lower Thresholds.
  • Signal Line: Colors based on the relationship between the RSI and its signal line.
  • Channel / Bands Range: Highlights the RSI when it reaches the extremes of the integrated Bollinger Bands or Donchian Channels.
• Divergences: The script can automatically detect and plot regular and hidden bullish/bearish divergences to signal potential trend exhaustion.
• Secondary RSI: A second, longer-period RSI can be overlaid to provide a multi-timeframe perspective on momentum within a single pane.

Details

This script calculates the "True RSI" by normalizing price changes against a moving average of the source price, which differs slightly from the standard RSI calculation to provide a more symmetric output around the 50-midline. The implementation includes:

• Smoothing Options: 21 different moving average types are available for both the main smoothing and the signal line.
• Volatility Envelopes: Integrated Bollinger Bands and Donchian Channels allow users to see how the RSI interacts with its own historical volatility.
• Multi-Timeframe Engine: The color reference can be set to a higher timeframe, allowing the current timeframe's RSI to reflect higher-order momentum trends.

Settings

Primary RSI

• Bar Color: Toggles price bar coloring based on RSI conditions.
• Indicator Smoothing: Switches the primary focus from the raw RSI to a smoothed version.
• Source/Period: Defines the input data and lookback length for the RSI.
• Color Reference: Selects the logic used for coloring (Range, Signal Line, Donchian, etc.).
• Timeframe Reference: Sets the timeframe for the coloring logic.
• Thresholds: Adjusts the levels for overbought (Upper) and oversold (Lower) zones.

Smoothed RSI & Signal Line

• Show Smoothed RSI/Signal Line: Toggles the visibility of additional lines.
• Type/Period: Selects the moving average algorithm and its length.
• MA Specific Inputs: Advanced parameters for specific filters like ALMA Offset, Jurik Phase, or KAMA constants.

Bands & Divergences

• Show Bands: Toggles Bollinger Bands or Donchian Channels.
• Pivot Period: Adjusts the sensitivity for divergence detection.
• Divergence Types: Checkboxes to enable regular or hidden bullish/bearish divergence plotting.

FAQ

How do I interpret the candle coloring? The coloring depends on your "Color Reference" setting; by default, it highlights bullish/bearish momentum relative to the thresholds or the signal line relationship.

Can I use this for trend following? Yes, by using the "Smoothed RSI" combined with a "Signal Line," you can treat crossovers as entry or exit signals within a trending environment.

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