RSI Confirm Trend with Williams (W%R)

The RSI Confirm Trend with Williams (W%R) indicator is a momentum-based tool that utilizes both the Relative Strength Index (RSI) and Williams Percent Range (W%R) to filter and confirm price trends. By combining the sensitivities of these two oscillators, the script identifies periods of strong directional momentum versus standard consolidation.

Usage

The indicator identifies trends by monitoring when RSI and Williams %R breach specific thresholds simultaneously. Users can observe the following signals based on the background coloring:

• Strong Uptrend (Dark Green): Occurs when the RSI is above the upper threshold (default 55) and the Williams %R is above -20. This indicates high-conviction bullish momentum.
• Weak Uptrend (Light Green): Occurs when the RSI is above the upper threshold, but Williams %R has not yet confirmed the strength.
• Strong Downtrend (Dark Red): Occurs when the RSI is below the lower threshold (default 45) and the Williams %R is below -80. This indicates high-conviction bearish momentum.
• Weak Downtrend (Light Red): Occurs when the RSI is below the lower threshold, but Williams %R remains outside the deep oversold zone.
• Neutral/Consolidation: When the background is clear or gray, it suggests the RSI is within its median range (45-55), indicating a lack of a clear trend.

Additionally, the script includes a Moving Average (MA) of the RSI. A crossover or crossunder of the RSI and its MA can serve as early entry or exit signals before the trend thresholds are met.

Details

This script is a modification and refinement of the RSI Trends concept. It integrates the Relative Strength Index—which measures the speed and change of price movements—with the Williams %R, an indicator that compares a closing price to the high-low range over a specific period. By aligning these two, the indicator filters out "noise" that might occur if only one oscillator were used. The RSI focuses on momentum magnitude, while the W%R focuses on price location relative to its recent range.

Settings

Thresholds

• RSI Upper Threshold: Sets the level above which the RSI is considered to be entering a bullish state (Default: 55).
• RSI Lower Threshold: Sets the level below which the RSI is considered to be entering a bearish state (Default: 45).

Moving Average

• MA Type: Selects the calculation method for the RSI's signal line (SMA or EMA).
• MA Length: Determines the lookback period for the RSI Moving Average.

FAQ

How do I access the RSI Confirm Trend with Williams (W%R)?

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

What is the difference between a "Strong" and "Weak" trend signal?

A "Weak" signal only requires the RSI to be beyond its thresholds, whereas a "Strong" signal requires both the RSI and the Williams %R to be in agreement in their respective overbought or oversold zones.

Can I change the sensitivity of the trend detection?

Yes, by adjusting the RSI Upper and Lower thresholds in the settings menu, you can make the indicator more or less reactive to price fluctuations.