RSI Pro - Kiyotaka

The RSI Pro - Kiyotaka indicator provides an advanced momentum oscillator framework that enhances the traditional Relative Strength Index by smoothing price action and utilizing a dual-line ribbon system for trend identification. It aims to reduce market noise and provide clearer signals for trend strength, reversals, and momentum shifts through customizable visual modes and divergence detection.

Usage

The Usage section describes how the script can be used to interpret market momentum and potential reversal points.

Momentum Identification

Users can identify the prevailing trend by observing the relationship between the RSI lines and the Signal Line. When the Fast RSI is above the Signal Line, a bullish ribbon is formed, suggesting upward momentum. Conversely, when the Fast RSI is below the Signal Line, a bearish ribbon indicates downward momentum. The "Bars" and "RSI Ribbon" plotting modes help visualize these shifts more clearly than a standard single-line RSI.

Trend Strength and Overbought/Oversold

The indicator includes thresholds (defaulting to 75 and 25) to identify overextended market conditions.

• Momentum Mode: Highlights areas where the RSI is in overbought or oversold territory, confirming strong trend continuation.
• Mean Reversion Mode: Can be used to highlight these same areas as potential exhaustion points where a reversal might occur.

Divergence Signals

The tool automatically detects two types of divergences:

• Confirmed Divergence (C): Based on pivot points, signaling a more established potential reversal.
• Early Divergence (E): Triggers when price makes a new extreme but the RSI holds, filtered by a specific zone and a trend "turn" or signal cross, providing a more proactive lead on price shifts.

Details

The RSI Pro - Kiyotaka utilizes a dual-RSI calculation method consisting of a Fast RSI (default 14) and a Slow RSI (default 20). Unlike the standard RSI which can be volatile, both calculations are smoothed using an Exponential Moving Average (EMA) to filter out "jitters."

The script allows users to choose between different RSI calculation types, including Wilder/RMA (standard), EMA, and SMA (Cutler). The "Ribbon" is generated by calculating the area between these smoothed RSIs and a Signal Line, which is a Simple Moving Average (SMA) of the RSI itself. This structure allows for a more nuanced view of momentum transition compared to a static 50-level crossover.

Settings

General Settings

• Plotting Mode: Changes the visual representation (RSI Ribbon, Bars, Line, or Ribbon Line).
• Highlight Mode: Determines background highlighting logic (None, Mean Reversion, or Momentum).
• Candle Coloring: Colors the chart candles based on Trend, Mean-Reversion, or Trend Strength.
• Source: The price data used for the RSI calculation (e.g., Close, OHLC4).
• RSI Type: Selects the mathematical method for the RSI (Wilder/RMA, EMA, SMA/Cutler).

RSI and Signal Settings

• Fast RSI Period: The lookback period for the primary fast-acting RSI.
• Slow RSI Period: The lookback period for the secondary slow-acting RSI.
• EMA Smooth: The length of the smoothing applied to the raw RSI values.
• Signal Line Length: The period for the SMA signal line.
• Signal Source: Determines if the signal line is derived from the Fast RSI, Slow RSI, or an average of both.

Thresholds and Divergence

• Show O/B O/S Levels: Toggles the visibility of the overbought and oversold horizontal lines.
• Overbought/Oversold Threshold: Sets the level for extreme momentum readings.
• Divergence Mode: Selects which types of divergence to display (Confirmed, Early, or Both).
• Divergence Pivot Left/Right: Sets the required bars to the left and right to confirm a pivot point.
• Early Divergence Zone Max/Min: Defines the RSI levels where early divergences are valid.

FAQ

How do I interpret the different colors in the RSI Ribbon? A green ribbon typically indicates that the RSI is above the signal line (bullish), while a red ribbon indicates it is below (bearish). The intensity or presence of background highlights depends on your selected Highlight Mode (Momentum or Mean Reversion).

What is the difference between Confirmed and Early Divergences? Confirmed divergences rely on established pivot highs or lows in both price and the oscillator, making them more lagging but reliable. Early divergences look for price breakouts while the oscillator holds its ground, combined with a quick RSI "turn," to catch moves before a pivot is fully formed.

How do I access the RSI Pro - Kiyotaka? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.