RSIOMA_v2

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Author: Copyright � 2004, MetaQuotes Software Corp.
RSIOMA_v2

This indicator is a sophisticated evolution of the standard Relative Strength Index (RSI), designed to provide traders with a clearer picture of market momentum, trend direction, and potential reversal points. Rather than just showing a simple oscillator, it incorporates moving averages and visual signals to help filter out market "noise."

Core Logic and Components

1. The Smoothed RSI Engine At its heart, the tool calculates the Relative Strength Index based on price changes. However, instead of using raw price points, it applies a Moving Average to those prices first. This smoothing technique helps stabilize the data, making the resulting RSI line less erratic and more reflective of sustained market sentiment rather than minor, temporary fluctuations.

2. Trend Identification (The Baseline) The indicator establishes clear boundaries to help define the primary trend of the market:

  • Upper Trend Boundary: A threshold (set at 50) that helps identify strong bullish momentum. When the indicator stays above this level, it suggests the prevailing trend is upward.
  • Lower Trend Boundary: Similarly, when the indicator remains below the lower 50 level, it signals a prevailing downward trend.

3. Reversal and Overbought/Oversold Signals To assist in identifying high-probability entry or exit points, the script monitors two specific zones:

  • Oversold Recovery: When the indicator dips into the lower zone (below 20) and begins to curve upward, it signals that the downward pressure may be exhausting and a reversal could be coming.
  • Overbought Exhaustion: Conversely, when the indicator climbs into the upper zone (above 80) and begins to curve downward, it indicates that the upward move may be overextended and a correction might be imminent.

4. Moving Average Overlay The script calculates an additional "Moving Average of the RSI" itself. This secondary line acts as a signal layer; by observing the relationship between the RSI line and this average, traders can better identify when momentum is accelerating or decelerating compared to its recent history.

Visual Experience

The indicator populates your trading window with several distinct visual elements:

  • Primary Lines: To track the smoothed RSI and its moving average.
  • Dynamic Histograms: These provide a vertical visual representation of the positive and negative momentum components, allowing you to see the "weight" behind the current price movement.
  • Reference Levels: The script automatically draws dotted horizontal lines for the Trend Boundaries (50) and the Trigger levels (20 and 80), providing a constant visual guide for your trading strategy.
Indicators Used
Moving average indicatorMoving average indicator
Miscellaneous
Implements a curve of type %1
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RSIOMA_v2 
/*
   This indicator was created by Kalenzo
   email: bartlomiej.gorski@gmail.com
   web: http://www.fxservice.eu
   
   The base for this indicator was orginal RSI attached with Metatrader.
*/
#property copyright "Copyright © 2004, MetaQuotes Software Corp."
#property link      "http://www.metaquotes.net/"

#property indicator_separate_window
#property indicator_minimum -10
#property indicator_maximum 100
#property indicator_buffers 6
#property indicator_color1 Blue
#property indicator_color2 Red
#property indicator_color3 Green
#property indicator_color4 Magenta
#property indicator_color5 DodgerBlue
#property indicator_color6 BlueViolet

//---- input parameters
extern int RSIOMA          = 14;
extern int RSIOMA_MODE     = MODE_EMA;
extern int RSIOMA_PRICE    = PRICE_CLOSE;

extern int Ma_RSIOMA       = 21,
           Ma_RSIOMA_MODE  = MODE_EMA;

extern int BuyTrigger      = 80;
extern int SellTrigger     = 20;

extern color BuyTriggerColor  = DodgerBlue;
extern color SellTriggerColor = Magenta;

extern int MainTrendLong   = 50;
extern int MainTrendShort  = 50;

extern color MainTrendLongColor     = Red;
extern color MainTrendShortColor    = Green;

//---- buffers
double RSIBuffer[];
double PosBuffer[];
double NegBuffer[];

double bdn[],bup[];
double sdn[],sup[];

double marsioma[];
string short_name;
//+------------------------------------------------------------------+
//| Custom indicator initialization function                         |
//+------------------------------------------------------------------+
int init()
  {
   short_name = StringConcatenate("RSIOMA(",RSIOMA,")");   
   IndicatorBuffers(8);
   
   SetIndexBuffer(0,RSIBuffer);
   SetIndexBuffer(2,bup);
   SetIndexBuffer(1,bdn);
   SetIndexBuffer(3,sdn);
   SetIndexBuffer(4,sup);
   SetIndexBuffer(5,marsioma);
   
   SetIndexStyle(0,DRAW_LINE,STYLE_SOLID,3);
   SetIndexStyle(2,DRAW_HISTOGRAM,STYLE_SOLID,1);
   SetIndexStyle(1,DRAW_HISTOGRAM,STYLE_SOLID,1);
   SetIndexStyle(3,DRAW_HISTOGRAM,STYLE_SOLID,1);
   SetIndexStyle(4,DRAW_HISTOGRAM,STYLE_SOLID,1);
   SetIndexStyle(5,DRAW_LINE,STYLE_SOLID,1);
   
   SetIndexBuffer(6,PosBuffer);
   SetIndexBuffer(7,NegBuffer);
      
   IndicatorShortName(short_name);

   SetIndexDrawBegin(0,RSIOMA);
   SetIndexDrawBegin(1,RSIOMA);
   SetIndexDrawBegin(2,RSIOMA);
   SetIndexDrawBegin(3,RSIOMA);
   SetIndexDrawBegin(4,RSIOMA);
   SetIndexDrawBegin(5,RSIOMA);
   SetIndexDrawBegin(6,RSIOMA);
   SetIndexDrawBegin(7,RSIOMA);
//----

 drawLine(BuyTrigger,"BuyTrigger", BuyTriggerColor);
   drawLine(SellTrigger,"SellTrigger", SellTriggerColor );
   drawLine(MainTrendLong,"MainTrendLong", MainTrendLongColor );
   drawLine(MainTrendShort,"MainTrendShort",MainTrendShortColor );

   return(0);
  }
//+------------------------------------------------------------------+
//| Relative Strength Index                                          |
//+------------------------------------------------------------------+
int start()
  {
   
  
   
   int    i,counted_bars=IndicatorCounted();
   double rel,negative,positive;
//----
   if(Bars<=RSIOMA) return(0);
//---- initial zero
   if(counted_bars<1)
      for(i=1;i<=RSIOMA;i++) RSIBuffer[Bars-i]=0.0;
//----
   i=Bars-RSIOMA-1;
   int ma = i;
   if(counted_bars>=RSIOMA) i=Bars-counted_bars-1;
   while(i>=0)
     {
      double sumn=0.0,sump=0.0;
      if(i==Bars-RSIOMA-1)
        {
         int k=Bars-2;
         //---- initial accumulation
         while(k>=i)
           {
            
            double cma = iMA(Symbol(),0,RSIOMA,0,RSIOMA_MODE,RSIOMA_PRICE,k);
            double pma = iMA(Symbol(),0,RSIOMA,0,RSIOMA_MODE,RSIOMA_PRICE,k+1);
            
            rel=cma-pma;
            
            if(rel>0) sump+=rel;
            else      sumn-=rel;
            k--;
           }
         positive=sump/RSIOMA;
         negative=sumn/RSIOMA;
        }
      else
        {
         //---- smoothed moving average
         double ccma = iMA(Symbol(),0,RSIOMA,0,RSIOMA_MODE,RSIOMA_PRICE,i);
         double ppma = iMA(Symbol(),0,RSIOMA,0,RSIOMA_MODE,RSIOMA_PRICE,i+1);
            
         rel=ccma-ppma;
         
         if(rel>0) sump=rel;
         else      sumn=-rel;
         positive=(PosBuffer[i+1]*(RSIOMA-1)+sump)/RSIOMA;
         negative=(NegBuffer[i+1]*(RSIOMA-1)+sumn)/RSIOMA;
        }
      PosBuffer[i]=positive;
      NegBuffer[i]=negative;
      if(negative==0.0) RSIBuffer[i]=0.0;
      else
      {
          RSIBuffer[i]=100.0-100.0/(1+positive/negative);
          
          bdn[i] = 0;
          bup[i] = 0;
          sdn[i] = 0;
          sup[i] = 0;
          
          if(RSIBuffer[i]>MainTrendLong)
          bup[i] = -10;
          
          if(RSIBuffer[i]<MainTrendShort)
          bdn[i] = -10;
          
          if(RSIBuffer[i]<20 && RSIBuffer[i]>RSIBuffer[i+1])
          sup[i] = -10;
          
          if(RSIBuffer[i]>80 && RSIBuffer[i]<RSIBuffer[i+1])
          sdn[i] = -10;
            
          
      }    
      i--;
     }
     
     while(ma>=0)
     {
         marsioma[ma] = iMAOnArray(RSIBuffer,0,Ma_RSIOMA,0,Ma_RSIOMA_MODE,ma); 
         ma--;
     }    
     
//----
   return(0);
  }
//+------------------------------------------------------------------+
void drawLine(double lvl,string name, color Col )
{
       
            ObjectDelete(name);
            ObjectCreate(name, OBJ_HLINE, WindowFind(short_name), Time[0], lvl,Time[0],lvl);
            
            
            ObjectSet(name, OBJPROP_STYLE, STYLE_DOT);
            
            ObjectSet(name, OBJPROP_COLOR, Col);        
            ObjectSet(name,OBJPROP_WIDTH,1);
          
       
}

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