Synthetic, Smoothed Variety RSI

The Synthetic, Smoothed Variety RSI indicator is a technical analysis tool that combines three separate Relative Strength Index calculations into a single synthetic output to provide a more robust view of market momentum. By averaging multiple RSI values derived from smoothed price data, the script aims to reduce noise and highlight significant trend shifts with greater clarity than a standard RSI.

Usage

The Usage section describes how the script can be used to identify trend direction and potential entry or exit points. The indicator features a primary synthetic RSI line and an EMA-based signal line.

• Trend Identification: When the synthetic RSI line is above the signal line (typically colored green), it indicates bullish momentum. Conversely, when it is below the signal line (typically colored red), it indicates bearish momentum.
• Signals: Crossovers between the synthetic RSI and the signal line generate "L" (Long) and "S" (Short) labels on the chart. These can be used to spot momentum reversals.
• Variety Selection: Users can choose from 7 different RSI types (RSX, Regular, Slow, Rapid, Harris, Cuttler, Ehlers Smoothed) to tailor the sensitivity and smoothing of the output to specific market conditions.
• Custom Sources: The tool supports a wide range of expanded source types, including Heikin Ashi and smoothed variants (HAB), allowing for deeper customization of the input data.

Details

The construction of the Synthetic, Smoothed Variety RSI follows a multi-step process to ensure a balanced output:

1. Triple EMA Smoothing: The selected source series is processed through three different Exponential Moving Averages (EMA) using three distinct user-defined periods.
2. Triple RSI Calculation: Three RSI values are calculated based on the outputs of the EMAs from the first step, using their own respective period inputs.
3. Weighted Averaging: The three RSI values are averaged using a weighted formula—(RSI3 + 2.0 * RSI2 + 3.0 * RSI1) / 6.0—to create the final synthetic line. This weighting places more emphasis on the longer-term RSI components to provide a more stable trend indication.
4. Signal Generation: An EMA of the synthetic RSI is calculated to serve as the signal line for crossover detection.

Settings

Basic Settings

• EMA 1-3 Period: Sets the smoothing periods for the three initial EMA calculations.
• RSI 1-3 Period: Sets the lookback periods for the three individual RSI calculations.
• Signal Period: Determines the length of the EMA used for the signal line.
• RSI type: Selects the specific RSI algorithm used (e.g., RSX, Cuttler, Ehlers Smoothed).

Source Settings

• HAB Calc Type: Chooses the smoothing method for "HAB" source types (AMA, T3, or Kaufman).
• Source: Selects the price input, ranging from standard OHLC values to advanced Heikin Ashi Biased (HAB) types.

Moving Average Inputs

• Kaufman's / AMA / T3 Inputs: Fine-tunes the specific parameters for the adaptive or smoothed moving averages if those source types are selected.

FAQ

How do I access Synthetic, Smoothed Variety RSI?

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

What makes this different from a standard RSI?

Unlike a standard RSI which looks at a single timeframe and single source, this indicator aggregates three different RSI calculations and pre-smooths the data with EMAs to provide a "synthetic" composite that filters out market volatility.

Which RSI type should I use?

"Regular" is standard, "Slow" is better for long-term trends, "Rapid" reacts faster to price changes, and "RSX" or "Ehlers Smoothed" provide advanced digital signal processing to reduce lag while maintaining smoothness.