JMA Modified RSI

The JMA Modified RSI indicator provides a modified Relative Strength Index (RSI) calculation that utilizes Jurik Moving Average (JMA) logic as the center point of difference to measure momentum with reduced lag and increased smoothness.

Usage

The Usage section describes how the script can be used, particularly in identifying trend momentum and potential reversals across multiple lookback periods.

• Trend Identification: Users can monitor the three plotted JMA-RSI lines (JRSI 0, JRSI 1, and JRSI 2) to determine trend direction. When the lines are rising and colored green, it indicates bullish momentum; when falling and colored red, it indicates bearish momentum.
• Multi-Period Analysis: By default, the script plots three distinct lengths (10, 60, and 420). This allows traders to see short-term momentum shifts relative to longer-term trends.
• Higher Timeframe Simulation: By enabling the "Simulate Higher Timeframe" setting, the indicator automatically adjusts the lookback periods of the secondary and tertiary lines to approximate the behavior of the indicator on higher timeframes without switching charts.
• Overbought/Oversold Levels: Traditional RSI levels (20, 50, 80) are provided as horizontal lines to help identify extreme market conditions.

Details

The JMA Modified RSI replaces the standard simple moving average or EMA usually found in RSI calculations with a JMA-based logic. This implementation uses a beta and alpha factor derived from the length and an exponent input to filter price noise. The RSI calculation then uses the ta.rma (Relative Moving Average) of the gains and losses relative to this JMA value. This results in a smoother oscillator that reacts more quickly to price changes than a standard RSI.

Settings

• Use Logarithmic Scale: Toggles whether the source price uses a logarithmic scale before the RSI calculation.
• Use Barcolor: Enables or disables coloring the chart bars based on the momentum of the longest JMA-RSI line (JRSI 2).
• Simulate Higher Timeframe: When enabled, automatically scales the lengths of the secondary and tertiary oscillators based on the current chart interval.
• JMA Exponent: Controls the power factor of the JMA calculation, affecting the smoothness and responsiveness of the output.
• Length 0: Sets the lookback period for the primary (fastest) JMA-RSI line.
• Length 1: Sets the lookback period for the secondary (medium) JMA-RSI line.
• Length 2: Sets the lookback period for the tertiary (slowest) JMA-RSI line.

FAQ

How do I interpret the colors of the JMA Modified RSI?

The lines change color based on their slope. A green line indicates the value is increasing (bullish momentum), while a red line indicates the value is decreasing (bearish momentum).

What is the advantage of using JMA in an RSI?

Using the Jurik-style moving average logic reduces the inherent lag found in standard RSI calculations while simultaneously providing a smoother curve that is less susceptible to market noise.

How can I access this indicator?

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