RSI combo

The RSI combo indicator is a multi-layered momentum tool that integrates traditional RSI with ADX-based exhaustion tracking and Relative Spread Strength (RSS) to identify high-probability reversal points.

Usage

The indicator can be used to identify potential market swings and exhaustion phases within price action. Users should look for the confluence of three main components:

• Exhaustion Lines: Thick green and red lines appear on the RSI plot when momentum and ADX suggest the current move is becoming overextended. A thick green line indicates downward exhaustion, while a thick red line indicates upward exhaustion.
• Swing Circles: Green circles (buy) and red circles (sell) represent the 350 RSI Swing component, identifying short-term pivot points when the RSI crosses overbought or oversold thresholds.
• RSS Background Bars: The top and bottom colored bars represent Relative Spread Strength. These act as a filter; when the bars turn silver, it often indicates a transition period, whereas colored bars highlight strong spread momentum.

A common strategy involves looking for a thick exhaustion line coupled with a swing circle, then waiting for the RSS background color to shift to silver before confirming an entry.

Details

The RSI combo combines several technical concepts into a single pane:

1. RSI Momentum & ADX: It calculates the ADX of the RSI itself to measure the strength of the RSI's movement. Exhaustion is triggered when the RSI is in a specific zone, the ADX momentum is positive, and the RSI direction is changing.
2. Relative Spread Strength (RSS): This is calculated based on the difference between two EMAs (10 and 40 periods), which is then processed through an RSI calculation and smoothed.
3. 350 Swing: A fast 3-period RSI is smoothed by a 3-period SMA to generate reactive swing signals when crossing the 20/80 levels.

Settings

• Show RSS (Relative Spread Strength)?: Toggles the visibility of the RSS smoothing line on the oscillator pane.
• Length RSI: Determines the lookback period for the main RSI calculation (default is 14).

FAQ

How do I interpret the thick colored lines on the RSI?

These represent exhaustion. A thick green line suggests the downward move is losing steam, while a thick red line suggests the upward move is reaching a limit based on ADX momentum.

What are the circles on the indicator?

The circles are "Swing 350" signals. Green circles suggest a potential bullish pivot, and red circles suggest a potential bearish pivot based on fast RSI crossovers.

How can I access RSI combo?

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