Custom Buy and Sell Signal with Body Ratio and RSI

The Custom Buy and Sell Signal with Body Ratio and RSI indicator provides traders with entry signals by analyzing candle body proportions, wick lengths, and volume conditions relative to RSI overbought and oversold levels.

Usage

The indicator generates "BUY" and "SELL" labels on the chart when specific confluence conditions are met. These signals are best utilized on the 1-hour (1H) timeframe to balance signal frequency with reliability.

Buy Signals

A buy signal occurs when:

• A bullish candle follows a bearish candle.
• The bullish body size is between 0.9 and 9 times the size of the previous bearish body.
• The lower wick of the bullish candle is shorter than the previous candle's lower wick.
• The RSI is below 40 (oversold).
• The current volume exceeds a dynamic threshold based on the previous day's volume range.

Sell Signals

A sell signal occurs when:

• A bearish candle follows a bullish candle.
• The bearish body size is proportional to the previous bullish body.
• The upper wick of the bearish candle is shorter than the previous upper wick and does not exceed 30% of the body size.
• The RSI is above 60 (overbought).
• The current volume exceeds the dynamic threshold.

Details

This script implements a dynamic volume filter to ensure signals are only generated during periods of significant market activity. It calculates the average of the highest and lowest volume over the last 24 periods and applies a user-defined coefficient to set a minimum threshold. This helps filter out signals during low-liquidity periods that might result in false breakouts or whipsaws. The body ratio logic ensures that the price action shows sufficient momentum to support a reversal.

Settings

• RSI Length: The number of bars used to calculate the Relative Strength Index (default is 14).
• Volume Coefficient: A multiplier applied to the average volume of the previous 24 bars to determine the dynamic volume limit. Higher values make the volume filter more restrictive.

FAQ

How do I access Custom Buy and Sell Signal with Body Ratio and RSI?

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

Which assets work best with this indicator?

The indicator is designed for volatile assets like Gold or major Forex pairs where volume surges often accompany trend reversals.

Can I adjust the signal sensitivity?

Yes, by modifying the Volume Coefficient or the RSI length in the settings, you can filter for more significant price movements or increase the frequency of signals.