Bollinger + RSI Signals

The Bollinger + RSI Signals indicator provides actionable trade signals by identifying confluence between overbought/oversold RSI conditions and Bollinger Band price breakouts.

Usage

The Bollinger + RSI Signals tool is used to identify potential trend reversals or mean reversion opportunities. A signal is only generated when both the Relative Strength Index (RSI) and Bollinger Bands confirm an extreme market condition simultaneously.

• Buy Signals: Occur when the price crosses above the lower Bollinger Band while the RSI simultaneously crosses above the Oversold threshold (defaulting at 40).
• Sell Signals: Occur when the price crosses below the upper Bollinger Band while the RSI simultaneously crosses below the Overbought threshold (defaulting at 60).

Users can observe the visual representation of the Bollinger Bands on the chart to gauge volatility, while the triangle shapes indicate the specific entry points where the criteria are met.

Details

This script is a modification of a classic strategy originally concepted by ChartArt in 2015. It focuses on filtering typical Bollinger Band signals with an RSI oscillator to reduce false entries during strong trending environments. By requiring both price action (BB cross) and momentum (RSI cross) to align, the script aims to capture high-probability pivot points.

Settings

• RSI Period Length: Sets the lookback period for the RSI calculation (default is 14).
• RSI Over Sold: The level at which the RSI is considered oversold (default is 40).
• RSI Over Bought: The level at which the RSI is considered overbought (default is 60).
• Bollinger Bands Length: The moving average period used for the Bollinger Bands (default is 20).
• Source: The price source used for the Bollinger Band calculations (default is Close).
• Multiplier: The standard deviation multiplier that determines the width of the Bollinger Bands (default is 2.0).

FAQ

How do I use the Bollinger + RSI Signals?

Wait for the triangle shapes to appear on your chart. A green triangle below the bar suggests a buying opportunity, while a red triangle above the bar suggests a selling opportunity based on the confluence of RSI and Bollinger Bands.

Can I adjust the sensitivity of the signals?

Yes, you can modify the RSI thresholds (60/40) or the Bollinger Band multiplier in the settings. Increasing the multiplier or narrowing the RSI thresholds will result in fewer, more selective signals.

Where 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.