RSI MACD

The RSI MACD indicator combines the momentum characteristics of the Relative Strength Index (RSI) with the trend-following properties of the Moving Average Convergence Divergence (MACD) to provide a smoother and more responsive oscillator.

Usage

The RSI MACD can be used to identify trend shifts and momentum exhaustion by observing the relationship between the two MACD lines and the zero level.

• Trend Confirmation: When the MACD lines are above the zero level, it suggests a bullish momentum fueled by the underlying RSI strength. Conversely, values below zero indicate bearish momentum.
• Dual-Layer Analysis: The tool plots two separate RSI MACD calculations (MACD 1 and MACD 2). Users can look for alignment between the short-term (MACD 1) and long-term (MACD 2) oscillators to confirm high-probability setups.
• Overbought/Oversold Context: Since the source is RSI-based, extreme readings near the provided horizontal levels (Upper/Lower levels) can signal potential mean reversion or momentum cooling.

Details

Unlike a traditional MACD that uses price as its source, this script applies the MACD formula (the difference between two Exponential Moving Averages) to the RSI values. This implementation filters out minor price noise and focuses on the rate of change in momentum. The indicator includes two distinct layers of calculation, allowing traders to observe multiple periodicities of RSI-based momentum simultaneously.

Settings

MACD 1 Settings

• Fast Length 1: The period for the short-term EMA used in the first MACD calculation.
• Slow Length 1: The period for the long-term EMA used in the first MACD calculation.
• Source 1: The price data source used for the first RSI calculation.
• RSI Length 1: The period used to calculate the RSI for the first MACD.

MACD 2 Settings

• Fast Length 2: The period for the short-term EMA used in the second MACD calculation.
• Slow Length 2: The period for the long-term EMA used in the second MACD calculation.
• Source 2: The price data source used for the second RSI calculation.
• RSI Length 2: The period used to calculate the RSI for the second MACD.

FAQ

How do I use the two different MACD lines?

MACD 1 is generally configured for faster response, while MACD 2 (plotted as an area) represents a broader trend. When both are in agreement (e.g., both above zero), the trend is considered strong.

What do the horizontal levels represent?

The levels at 5, 10, -5, and -10 act as visual guides to identify when the RSI-based momentum has reached historical extremes, similar to overbought and oversold levels on a standard RSI.

How can I access the RSI MACD?

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