ADX and RSI Combo

The ADX and RSI Combo indicator provides a unified oscillator view by combining two Relative Strength Index (RSI) calculations with an Average Directional Index (ADX) to help traders identify trend strength and overbought/oversold conditions simultaneously.

Usage

The Usage section focuses on interpreting the combined momentum and trend strength data:

• RSI Analysis: The indicator plots two RSI lines (defaulting to lengths of 2 and 5). This allows traders to observe short-term momentum shifts. When the faster RSI crosses specific thresholds (15 and 85), the script can display triangular "triggers" to highlight potential reversals.
• Trend Strength (ADX): The ADX line indicates the overall strength of a trend regardless of direction. Values above 20-25 typically suggest a trending market, while lower values suggest a ranging or sideways market.
• Directional Bias (DI+/DI-): The DI+ (green) and DI- (red) lines help determine the direction of the trend. When DI+ is above DI-, the bullish pressure is stronger; when DI- is above DI+, bearish pressure dominates.

Details

The script implements a "Simple RSI" option which utilizes a Simple Moving Average (SMA) for the gain/loss calculation instead of the standard Wilder’s smoothed Moving Average (RMA). This choice allows for more reactive signals in volatile markets. The ADX and Directional Indicators are calculated using standard Wilder's smoothing techniques to ensure consistency with traditional technical analysis methods.

Settings

• RSI1 Length: The lookback period for the first RSI line.
• RSI2 Length: The lookback period for the second RSI line.
• Simple RSI(1/2): Toggles between using an SMA (Simple) or RMA (Wilder's) for the RSI calculations.
• Show RSI Triggers: Enables or disables the visual triangle shapes when RSI crosses oversold (15) or overbought (85) levels.
• ADX Length: The lookback period for the ADX, DI+, and DI- calculations.

FAQ

How do I interpret the RSI triggers?

The green upward triangles appear when the secondary RSI crosses above 15 from below, suggesting a bullish recovery. Red downward triangles appear when it crosses below 85, suggesting a bearish reversal.

What is the difference between "Simple RSI" and standard RSI?

The Simple RSI uses an SMA for averaging gains and losses, making it more sensitive to recent price changes compared to the standard RMA-based RSI.

How can I access ADX and RSI Combo?

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