RSI with Trend Lines

The RSI with Trend Lines indicator is a comprehensive momentum tool that combines the Relative Strength Index with automated trend line detection to identify breakouts and structural shifts. It enhances standard RSI analysis by projecting dynamic support and resistance lines directly on the oscillator pane, allowing traders to visualize trend development within momentum.

Usage

The Usage section focuses on interpreting the various visual components of the indicator to identify market opportunities.

• Momentum Trends: The RSI line changes color based on its slope (green for rising, red for falling) and its position relative to the 50 centerline. A cross above 50 suggests bullish strength, while a cross below suggests bearish momentum.
• Dynamic Support & Resistance: The script identifies pivot points on the RSI and draws bullish (ascending) and bearish (descending) trend lines.
  • Bullish Lines: Formed by connecting ascending low pivot points, acting as dynamic support.
  • Bearish Lines: Formed by connecting descending high pivot points, acting as dynamic resistance.
• Breakout Signals: When the RSI breaks a trend line, the line is displayed as a dotted "broken" line. A break above a bearish trend line may signal a buy opportunity, while a break below a bullish trend line may signal a sell opportunity.
• Point of Control (POC): The included table displays the POC value, which identifies the price level with the highest trading volume over a specific lookback period. This level often acts as a significant horizontal support or resistance zone.

Details

The script utilizes a configurable pivot point period to identify local highs and lows on the RSI. It then evaluates multiple pivot points to construct valid trend lines. To maintain visual clarity, the script can distinguish between active trends and "broken" trends that have been breached by the current RSI value. The Point of Control calculation uses a volume profile approach, segmenting price into discrete levels and aggregating volume to find the equilibrium point of market activity.

Settings

RSI and MA

• RSI Length: The lookback period for the Relative Strength Index calculation.
• RSI Source: The price source used for the RSI (e.g., Close, HL2).
• Show MA of RSI: Enables a moving average line on the RSI.
• Type: The type of moving average used (SMA, EMA, WMA, or ALMA).
• Length (MA): The lookback period for the RSI moving average.

Trend Lines & Pivots

• Show Trend Lines: Toggles the visibility of active RSI trend lines.
• Extend Lines: Extends the trend lines indefinitely into the future.
• Show Pivot Points: Displays "H" and "L" labels on the RSI pivots.
• Show Broken Trend Lines: Displays trend lines that have been invalidated by price action as dotted lines.
• Pivot Point Period: The number of bars required to confirm a pivot high or low.
• Number of Pivot Points to check: The depth of the search for connecting points.
• Line Style/Width: Visual customization for the trend lines.

Point Of Control (POC)

• Show POC in Table: Toggles the display of the POC price table.
• Lookback Length: The number of historical bars used to calculate the volume profile.
• Number of Price Levels: The granularity of the volume profile calculation.

FAQ

How do I interpret the colored RSI line? The line is colored green when rising and red when falling. Furthermore, the intensity or primary hue changes based on whether the RSI is above or below the 50 centerline to highlight the prevailing momentum bias.

What do the dotted lines signify? Dotted lines represent "broken" trend lines. These are historical trends that were valid until the RSI value crossed through them, often signifying a momentum breakout or reversal.

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