RSI Stochastic Extreme Combo alert

The RSI Stochastic Extreme Combo alert indicator is a momentum-based tool designed to identify confluence between the Relative Strength Index (RSI) and the Stochastic Oscillator to highlight extreme overbought and oversold market conditions.

Usage

The tool is used to identify high-probability reversal zones by looking for moments where both oscillators simultaneously reach user-defined extreme levels.

• Bullish Signal (Oversold): When both the RSI and the Stochastic Oscillator fall below their respective lower thresholds, a green column is plotted. This suggests the asset may be overextended to the downside.
• Bearish Signal (Overbought): When both the RSI and the Stochastic Oscillator rise above their respective upper thresholds, a red column is plotted. This suggests the asset may be overextended to the upside.

Users can experiment with different levels depending on the asset's volatility. For example, tighter bounds (like 35/65) provide more frequent signals, while wider bounds (like 10/90 for Stochastic and 30/70 for RSI) filter for more significant extremes.

Details

The indicator calculates a standard RSI and a Stochastic K-line based on the input lengths. Unlike traditional oscillators that plot lines in a separate pane, this script focuses on the confluence of the two. It only triggers a visual signal (columns) when the criteria for both indicators are met simultaneously. This filtering process helps reduce "noise" that might occur if only one oscillator reached an extreme level while the other remained in a neutral zone.

Settings

• RSI Length: Determines the lookback period for the RSI calculation.
• Stoch Length: Determines the lookback period for the Stochastic calculation.
• Stoch K: Sets the smoothing period for the Stochastic K-line.
• RSI Low Value: The threshold below which the RSI is considered oversold.
• RSI High Value: The threshold above which the RSI is considered overbought.
• Stochastic Low Value: The threshold below which the Stochastic is considered oversold.
• Stochastic High Value: The threshold above which the Stochastic is considered overbought.

FAQ

How do I use the alerts?

The script includes built-in alert conditions that trigger when the combined overbought or oversold conditions are met. You can set these to "Once Per Bar Close" to confirm the signal.

What timeframes does this work on?

While designed to be versatile, it is often most effective on timeframes where trend exhaustion is more clearly defined by momentum oscillators, such as the 1-hour or Daily charts.

How do I get access?

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