Supertrend with RSI Filter

The Supertrend with RSI Filter indicator combines the traditional Supertrend trend-following logic with a Relative Strength Index (RSI) filter to provide more refined market signals and minimize false entries.

Usage

This tool can be used to identify trend direction while simultaneously assessing the strength of the underlying momentum.

• Bullish Trend: When the price is above the Supertrend line, the trend is considered bullish. If the RSI is above the user-defined threshold, the line and background colors appear more vivid, confirming strong momentum. If the RSI is below the threshold, the color becomes more transparent, signaling a weaker or unconfirmed trend.
• Bearish Trend: When the price is below the Supertrend line, the trend is bearish. A dark red color indicates the RSI is below the threshold (strong confirmation), while a lighter/grayish tone indicates the RSI is above the threshold (weak confirmation).
• Classic Mode: By toggling the "Use Classic Supertrend" setting, traders can revert to a standard Supertrend display without the RSI-based transparency effects.

Details

The indicator calculates the Supertrend line using the Average True Range (ATR) and a multiplier, following standard methodology. The innovation lies in the integration of the RSI as a secondary filter. The script calculates the distance between the current RSI value and a set threshold (defaulting to 50). This distance determines the transparency of the trend highlights: as the RSI moves further away from the threshold in the direction of the trend, the visual confirmation becomes stronger.

Settings

General Settings

• Use Classic Supertrend: When enabled, the indicator disables the RSI-based color filtering and displays a standard Supertrend.
• ATR Length: The lookback period used for the Average True Range calculation.
• ATR Factor: The multiplier applied to the ATR to determine the distance of the Supertrend line from the price.
• RSI Period: The lookback period used to calculate the Relative Strength Index.
• RSI Threshold: The level used to differentiate between strong and weak momentum (typically set at 50).

FAQ

How do I interpret the transparency?

More vivid colors indicate that the RSI is significantly past the threshold in favor of the current trend, suggesting strong momentum. Faded colors suggest the momentum does not currently support the Supertrend direction.

Can I use this for scalping?

Yes, by adjusting the ATR Length and Factor to be more sensitive, the indicator can be adapted for shorter timeframes, though the RSI filter remains helpful for avoiding choppy conditions.

How do I access the Supertrend with RSI Filter?

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