RSI & MACD

The RSI & MACD indicator combines two of the most popular momentum oscillators into a single interface to help traders identify trend direction, momentum strength, and potential reversal points more efficiently.

Usage

The tool can be used to identify confluence between trend-following (MACD) and mean-reversion (RSI) signals. Traders typically look for the following:

• Momentum Shifts: Watch for MACD crossovers (the blue MACD line crossing the Signal line) alongside the color-coded histogram to gauge accelerating or decelerating momentum.
• Overbought/Oversold Conditions: Use the RSI plot to identify when a security is potentially overextended. Crosses above 70 indicate overbought conditions, while crosses below 30 indicate oversold conditions.
• Divergences: Look for discrepancies between price action and the oscillator movements to spot potential trend exhaustion.
• Trend Confirmation: Use the MACD histogram staying above or below the zero line as a confirmation of the prevailing short-term trend.

Details

The script integrates standard Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) logic into a unified script. The MACD calculation provides flexibility, allowing users to choose between Exponential Moving Averages (EMA) or Simple Moving Averages (SMA) for both the oscillator and the signal line. The histogram is visually enhanced with four colors to represent growing or falling momentum relative to the zero line.

Settings

RSI Inputs

• RSI Length: Determines the lookback period for the RSI calculation (default is 14).

MACD Inputs

• MACD Fast Length: The period for the shorter-term moving average.
• MACD Slow Length: The period for the longer-term moving average.
• MACD Signal Smoothing: The smoothing period for the MACD signal line.
• Simple MA (Oscillator): When enabled, uses SMA instead of EMA for the fast and slow MACD lines.
• Simple MA (Signal Line): When enabled, uses SMA instead of EMA for the signal line smoothing.

General

• Source: The price data used for all calculations (default is Close).

FAQ

How do I use the RSI & MACD indicator?

The indicator is used to find confluence between momentum and trend. You can look for signals like MACD line crosses or RSI exiting overbought/oversold zones to time entries and exits.

Can I change the moving average types?

Yes, the settings menu allows you to toggle between Simple Moving Averages and Exponential Moving Averages for the MACD components.

How can I access RSI & MACD?

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