RSI Volume

The RSI Volume indicator estimates bullish and bearish money flow by applying the Relative Strength Index formula to volume data instead of price changes, helping traders identify which side of the market is currently dominating the volume profile. By analyzing the relationship between buy and sell volume across different timeframes, it provides a unique perspective on trend strength and potential exhaustion points.

Usage

The RSI Volume can be used as a momentum and trend confirmation tool. When the indicator line is green and above the central threshold, it indicates a bullish volume trend (up-volume is stronger). Conversely, a red line below the threshold suggests a bearish volume trend (down-volume is stronger).

• Trend Identification: Use the color-coded line to quickly identify if buying pressure or selling pressure is currently leading.
• Overbought/Oversold Levels: Traditional RSI levels (defaulting to 80/20) can indicate extreme volume imbalance, which often precedes a cooling-off period or price reversal.
• Intraday Analysis: By using a lower timeframe resolution for volume calculation, the indicator provides a more granular look at "hidden" volume distribution within a single candle.

Details

Unlike standard price-based RSI, which only looks at the closing price of bars, this indicator calculates the ratio of up-volume to down-volume. To increase accuracy, it uses a configurable lower timeframe (LTF) resolution to estimate the volume distribution within each candle.

If "Weighted Wicks" is enabled, the script uses a specific formula to assign volume to the upper and lower wicks based on their size relative to the body, providing a more realistic approximation of price action intensity than simple close-to-close comparisons.

Settings

Volume

• Source: The price source used for the RSI calculation.
• Resolution: The lower timeframe used to calculate more precise buy/sell volume distributions.
• Weighted Wicks: When enabled, the indicator uses a formula to split volume between the body and wicks; when disabled, volume is assigned based on whether the candle closed up or down.

RSI

• Length: The lookback period for the RSI calculation.
• Overbought: The upper threshold level for extreme volume momentum (default is 80).
• Oversold: The lower threshold level for extreme volume momentum (default is 20).
• Threshold: Controls the sensitivity of the neutral zone around the 50-level for trend changes.

FAQ

How do I use the "Resolution" setting?

The Resolution setting should be set to a lower timeframe than your current chart. For example, if you are on a 1-hour chart, setting the Resolution to 15 minutes will allow the script to analyze the volume distribution within each 1-hour candle more accurately.

What is the benefit of using RSI on Volume instead of Price?

Price RSI tells you how fast price is moving, but Volume RSI tells you how much "effort" or capital is behind those moves. This helps distinguish between high-conviction trends and low-volume price fluctuations.

How can I access RSI Volume?

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