Multi-Spectral RSI Deviations

The Multi-Spectral RSI Deviations indicator provides a multi-layered perspective on market momentum and potential reversals by analyzing the relationship between three different Relative Strength Index (RSI) lengths. It enables traders to visualize trend shifts and spot price-momentum divergences through advanced smoothing techniques and intuitive color-coded plots.

Usage

The tool is primarily used to identify momentum trends and anticipate market turning points. Traders can utilize the indicator in several ways:

• Trend Identification: The primary line changes color based on current momentum direction. An "Up Colour" indicates positive momentum, while a "Down Colour" signifies negative momentum.
• Reversal Signals: The indicator plots specific markers for trend shifts. Circles (●) indicate a standard shift in momentum direction, while Triangles (▲/▼) indicate potential reversals occurring at extreme momentum levels.
• Divergence Detection: Built-in divergence plotting highlights regular bullish and bearish divergences between price action and the multi-spectral oscillator, suggesting weakening trends and likely reversals.
• Overbought/Oversold Context: The background fills and secondary plots provide context for whether the combined RSI spectral analysis is reaching extreme upper or lower bounds.

Details

The Multi-Spectral RSI Deviations indicator calculates three separate RSI values over user-defined short, medium, and long-term periods. It then analyzes the delta between these values (v1 - v2 and v2 - v3) to create a spectrum of momentum insights. To remove market noise, these differences are averaged and smoothed using a Hull Moving Average (HMA). Additionally, a secondary smoothed component based on the longest RSI (v3) helps define the baseline "Zero" region, providing a clearer view of whether the overall market sentiment is bullish or bearish relative to the 50-level midline.

Settings

General Settings

• Up/Down Colour: Sets the colors used for bullish and bearish momentum displays.
• RSI Length 1, 2, & 3: Determines the three lookback periods for the internal RSI calculations.
• Smoothing Length: Adjusts the period for the final oscillator smoothing (HMA).

MA Settings

• MA Type: Select the type of moving average (SMA, EMA, HMA, etc.) used for the signal line.
• MA Length: The lookback period for the signal line calculation.

Divergence Settings

• Plot Bullish/Bearish Divergences: Toggle the visibility of divergence signals.
• Divergence Pivot Detection Length: Controls the lookback for identifying pivot points. Higher values decrease sensitivity.
• Divergence Pivot Confirmation Length: Sets the number of bars required to confirm a pivot. Higher values reduce false signals but increase lag.

FAQ

How do I use the signals from this indicator?

You can look for color changes for trend following, or monitor the triangle icons and plotted divergence lines for potential contrarian entries or exit points.

What do the different RSI lengths represent?

The three lengths allow the indicator to look at short-term, medium-term, and long-term momentum simultaneously, reducing the "noise" often found in a single RSI period.

How can I access Multi-Spectral RSI Deviations?

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