Momentum-RSI-Signal

The Momentum-RSI-Signal indicator is a momentum-based tool designed to identify specific bullish confluence points when both the Relative Strength Index (RSI) and Price Momentum are simultaneously increasing from oversold or neutral levels.

Usage

The indicator generates a binary signal (0 or 100) plotted on the chart. A signal occurs when the following conditions are met:

• The RSI is currently below the 50 level.
• The RSI value is higher than the previous bar's RSI value.
• The Momentum value (Price - Price n-bars ago) has increased by a specific threshold compared to the previous bar.

This tool is primarily used to catch early trend reversals or bullish "pops" in momentum while the asset is still technically in a lower RSI range. Users can look for the signal line to jump to the 100 level as a potential entry or trend-continuation alert.

Details

The script calculates two primary components:

1. Momentum: Calculated as the difference between the current source price and the price $n$ periods ago.
2. RSI: A standard Relative Strength Index calculation based on a defined length and source.

The logic focuses on "Directional Change." It doesn't just look at absolute values but at the rate of change between the current bar and the previous bar. The signal is specifically tuned to fire when RSI is rising but still under 50, and when the change in momentum (Momentum Direction) is greater than or equal to a threshold of 3.

Settings

• Length: Sets the period used for the Momentum calculation (Current Price - Price n-bars ago).
• Source: Determines the price data used for the Momentum calculation (e.g., Close, Open, High, Low).
• RSI Source: Determines the price data used for the RSI calculation.
• RSI Length: Sets the lookback period for the RSI calculation.

FAQ

How do I interpret the signals?

When the indicator line jumps from 0 to 100, it indicates that both RSI and price momentum are increasing while the RSI is still in a bearish or neutral zone (below 50), suggesting a potential bullish shift.

Can I change the sensitivity?

Yes, by adjusting the "Length" for momentum and "RSI Length," you can make the indicator more or less responsive to price fluctuations.

How can I access this indicator?

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