RSI Ribbon + Candle

The RSI Ribbon + Candle indicator combines the Relative Strength Index (RSI) with a multiple moving average ribbon to provide a comprehensive visualization of trend momentum and potential reversals.

Usage

The tool is primarily used to identify trend strength and direction through color-coded visual cues on both the oscillator ribbon and the chart candles.

• Trend Strength: Green and lime colors indicate strong bullish momentum, while red and maroon signify bearish trends.
• Neutral Zones: Yellow (or blue/gray depending on color settings) indicates periods of caution, consolidation, or no clear trend.
• Divergences: Users can look for discrepancies between price action and the RSI Ribbon peaks/troughs to identify potential trend exhaustion.
• Bar Coloring: The script applies colors to the price bars based on "Trend Power," a calculated value derived from the ranking and slope of the moving average stack.

Details

The indicator calculates a fast RSI and then applies a series of nine moving averages to that RSI value. These moving averages use incremental lengths based on a user-defined scalar, creating a "ribbon" effect.

The core logic employs a "Trend Power" calculation (maTPower). This value is determined by the maRank function, which evaluates the slope of each moving average relative to its position against a baseline (the 9th MA). This helps in quantifying whether momentum is accelerating or decelerating within the overall trend.

Settings

• RSI Source: Determines the price data (e.g., Close, Open, High, Low) used for the RSI calculation.
• Fast RSI Period Length: Sets the lookback period for the initial RSI calculation.
• MA Period Length Incremental Scalar: Sets the base multiplier for the nine moving average lengths in the ribbon.
• Exponential MA Set 1?: A toggle to switch between Exponential Moving Averages (EMA) and Simple Moving Averages (SMA) for the ribbon construction.

FAQ

How do I interpret the ribbon colors?

Bright green suggests strong upward momentum, while darker red suggests strong downward momentum. Transitionary colors indicate weakening trends or potential reversals.

Can I use this for divergence trading?

Yes, the RSI Ribbon is particularly useful for spotting momentum divergences by comparing the peaks and troughs of the ribbon against the peaks and troughs of price.

How do I get access to RSI Ribbon + Candle?

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