Zig Zag High-Low + RSI

The Zig Zag High-Low + RSI indicator provides a visual framework for identifying trend exhaustion or strength by overlaying Relative Strength Index (RSI) values onto price-based pivot points. It helps traders determine if a current trend is gaining or losing momentum through the comparison of peak RSI values at specific high-low intervals.

Usage

The tool is designed to assist in identifying potential trend continuations or reversals based on pivot behavior and momentum readings.

• Uptrend Analysis: When the script identifies consecutive higher highs and higher lows, users should observe the RSI label displayed above the pivot high. A later pivot high with a greater RSI value than the previous peak suggests a strengthening uptrend, potentially indicating long opportunities.
• Downtrend Analysis: Conversely, in a downtrend marked by lower highs and lower lows, a lower high accompanied by a lower RSI value than the previous high suggests trend persistence.
• Weakening Trends: If price makes a new high but the RSI value at that pivot is lower than the previous peak, it indicates bearish divergence and a potentially weakening trend.

The methodology is often most effective during high-liquidity sessions, such as the period between 6 AM and 11 AM EST.

Details

This script is an extension of the classic Zig Zag High Low logic, originally popularized by Tr0sT. It operates by identifying local maxima and minima over a user-defined lookback window.

The core value proposition lies in the integration of momentum directly onto the price chart labels. By calculating the RSI value specifically at the bar where the pivot high occurs, the indicator allows for an immediate "at-a-glance" assessment of whether the price action is backed by relative strength. The labels are color-coded: a green label signifies that the current pivot RSI is higher than the previous one (strengthening), while a red label signifies a lower RSI (weakening).

Settings

Main Settings

• High/Low Length: Sets the lookback period used to identify the pivot points for the Zig Zag lines.
• RSI Length: Determines the period used for the Relative Strength Index calculation.

Visuals

• RSI Color Up: Adjusts the color of the labels when the current pivot RSI is greater than the previous one.
• RSI Color Down: Adjusts the color of the labels when the current pivot RSI is lower than the previous one.

FAQ

How do I use the Zig Zag High-Low + RSI for trend confirmation?

Compare the RSI value displayed on the current pivot high to the value on the previous pivot high; an increasing value suggests a strengthening trend, while a decreasing value suggests momentum is fading.

What do the label colors signify?

Green labels indicate that the RSI at the current peak is higher than the previous peak, while red labels indicate that the RSI at the current peak is lower than the previous peak.

How can I access Zig Zag High-Low + RSI?

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