RSI & Stochastic

The RSI & Stochastic indicator provides a dual-oscillator perspective by combining the Relative Strength Index (RSI) and Stochastic oscillator into a single pane to help traders identify momentum shifts and trend reversals efficiently.

Usage

The tool can be used to identify trend momentum and potential exhaustions. Traders typically look for the following:

• RSI Midline Crosses: When the RSI line crosses above 50, it signals bullish momentum, whereas a cross below 50 indicates bearish momentum. The background area between the RSI and the 50 level is colored to visualize this shift.
• Stochastic Crossovers: The interaction between the Stochastic %K and %D lines helps identify short-term momentum changes. A %K line crossing above %D (bullish cross) or below %D (bearish cross) can signal entry or exit points, highlighted by the dynamic filling between the lines.
• Overbought/Oversold Levels: The standard 80 and 20 horizontal levels serve as references for potential price exhaustion.

Details

This implementation overlays the RSI and Stochastic components on a shared scale. The RSI is calculated using a default length of 21, providing a smoother trend representation than shorter-period RSIs. The Stochastic component uses a %K length of 15, with smoothing factors of 5 for %K and 3 for %D. By visualizing both oscillators together, traders can look for confluences, such as a Stochastic bullish cross occurring while the RSI is above the 50 neutral level.

Settings

• RSI Length: Determines the lookback period for the RSI calculation (default: 21).
• STOCH - K Length: Sets the lookback period for the Stochastic calculation (default: 15).
• STOCH - K Smooth: Controls the smoothing of the %K line (default: 5).
• STOCH - D Smooth: Controls the smoothing of the %D line (default: 3).

FAQ

How do I interpret the colored fills?

The fill between the RSI line and the 50 level indicates whether momentum is currently bullish (green) or bearish (red). The fill between the Stochastic K and D lines highlights the current directional bias of the short-term momentum.

Can I change the sensitivity of the indicators?

Yes, all parameters including the RSI length and the various Stochastic smoothing values are fully adjustable in the settings menu to suit different timeframes and trading styles.

How can I access the RSI & Stochastic?

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