Candilator RSI

The Candilator RSI indicator transforms the traditional Relative Strength Index into a comprehensive candlestick chart format to provide deeper insights into momentum and price action within the oscillator space. By calculating separate RSI values for open, high, low, and close prices, this tool allows traders to apply candlestick analysis directly to the RSI to better identify reversals and trend exhaustion.

Usage

The Usage section describes how the script can be used to improve market analysis. Traders can utilize the Candilator RSI in the same way as a standard RSI to identify overbought and oversold conditions, as well as bullish or bearish divergences.

Furthermore, the candlestick representation allows for the application of price action techniques within the oscillator pane. The script specifically highlights:

• Outside Bar Patterns: Detected in overbought or oversold zones, these often signal a strong volatility expansion and potential reversal.
• Inside Bar Patterns: Detected in extremes, these signify compression and a potential shift in momentum.

Users can look for bullish patterns in the oversold zone (typically below 30) or bearish patterns in the overbought zone (typically above 70) to confirm potential entry points.

Details

The Candilator RSI constructs its visual output by calculating four distinct RSI values based on the OHLC data of the price.

• RSI Open: ta.rsi(open, length)
• RSI High: Determined by the maximum of the RSI calculated on high and low inputs.
• RSI Low: Determined by the minimum of the RSI calculated on high and low inputs.
• RSI Close: ta.rsi(close, length)

By plotting these values using the plotcandle function, the indicator creates a visual "Candilator" that reveals the internal momentum range within each bar, which is otherwise lost in a standard single-line RSI.

Settings

Main Settings

• Period: The lookback period used for the RSI calculations (default is 14).
• Overbought Level: The threshold used to define the overbought zone and filter pattern detections.
• Oversold Level: The threshold used to define the oversold zone and filter pattern detections.

Pattern Detection

• Outside Bar Pattern: Toggles the detection and labeling of Outside Bar formations.
• Inside Bar Pattern: Toggles the detection and labeling of Inside Bar formations.

FAQ

How do I use the patterns shown on the Candilator RSI?

The patterns are most effective when they appear in the overbought or oversold zones. A "Bullish Inside Bar" in the oversold zone suggests that selling pressure is exhausting and a move upward may be imminent.

Can I change the RSI length?

Yes, the RSI length can be adjusted in the "Main Settings" section of the indicator inputs to suit different timeframes or trading styles.

How can I access the Candilator RSI?

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