T3 RSI_v2
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This tool is designed to provide a specialized visual analysis of market trends by combining two distinct mathematical concepts: the Relative Strength Index (RSI) and the T3 Moving Average.
Unlike standard indicators that might show "choppy" or reactive price movements, this script smooths out market data to help traders identify clearer momentum signals. Here is a breakdown of how the logic functions:
The Core Components
- Relative Strength Index (RSI): The script first looks at the RSI, which is a standard momentum oscillator. It measures the speed and change of price movements to determine whether an asset is being overbought or oversold.
- The T3 Smoothing Logic: Instead of applying a standard moving average to the price, this tool applies a sophisticated "T3" filter to the RSI data itself. The T3 is known for its ability to reduce "lag"—the delay between a market move and the indicator's reaction—while remaining much smoother than traditional averages.
How the Logic Works
- Data Processing: The script takes the raw RSI value and passes it through a multi-stage smoothing process. It uses specific coefficients (based on the "Curvature" setting) to calculate a series of weighted values.
- Weighted Averaging: By using a series of mathematical steps, the script calculates a refined trend line. This effectively "cleans" the noise out of the RSI, ensuring that the resulting line doesn't jump around erratically with every minor price flicker.
- Visual Output: The result is displayed as two distinct lines in a separate window below your main chart. By looking at how these smoothed lines interact, you can better visualize the underlying momentum of the market.
Key Purpose
The primary goal of this logic is clarity. By applying the T3 smoothing technique to an RSI period, the script aims to provide a clearer picture of trend direction and strength. It allows you to see the "big picture" of market momentum while filtering out the minor distractions that often lead to false signals in standard trading tools.
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T3 RSI_v2
//+------------------------------------------------------------------+
//| T3_RSI.mq4 |
//| MojoFX |
//| http://groups.yahoo.com/group/MetaTrader_Experts_and_Indicators/ |
//+------------------------------------------------------------------+
#property copyright "MojoFX - Conversion only"
#property link "http://groups.yahoo.com/group/MetaTrader_Experts_and_Indicators/"
//----
#property indicator_separate_window
#property indicator_buffers 2
#property indicator_color1 Red
#property indicator_color2 White
//----
extern int RSI_Period=8;
extern int T3_Period=8;
extern double T3_Curvature=0.618;
//----
double t3Array[];
double rsiArray[];
double e1,e2,e3,e4,e5,e6;
double c1,c2,c3,c4;
double n,w1,w2,b2,b3;
//+------------------------------------------------------------------+
//| Custom indicator initialization function |
//+------------------------------------------------------------------+
int init()
{
//---- indicators setting
SetIndexStyle(0,DRAW_LINE,STYLE_SOLID,3,Red);
SetIndexStyle(1,DRAW_LINE,STYLE_SOLID,1,White);
//
IndicatorDigits(MarketInfo(Symbol(),MODE_DIGITS));
IndicatorShortName("T3 RSI "+T3_Period);
//
SetIndexBuffer(0,t3Array);
SetIndexLabel(0,"T3 "+T3_Period);
//
SetIndexBuffer(1,rsiArray);
SetIndexLabel(1,"RSI "+T3_Period);
//---- variable reset
e1=0; e2=0; e3=0; e4=0; e5=0; e6=0;
c1=0; c2=0; c3=0; c4=0;
n=0;
w1=0; w2=0;
b2=0; b3=0;
//
b2=T3_Curvature*T3_Curvature;
b3=b2*T3_Curvature;
c1=-b3;
c2=(3*(b2+b3));
c3=-3*(2*b2+T3_Curvature+b3);
c4=(1+3*T3_Curvature+b3+3*b2);
n=T3_Period;
//
if (n<1) n=1;
n=1 + 0.5*(n-1);
w1=2/(n + 1);
w2=1 - w1;
//----
return(0);
}
//+------------------------------------------------------------------+
//| Custom indicator iteration function |
//+------------------------------------------------------------------+
int start()
{
int limit=Bars;
//---- indicator calculation
for(int i=limit; i>=0; i--)
{
rsiArray[i]=iRSI(NULL,0,T3_Period,PRICE_CLOSE,i);
//
e1=w1*rsiArray[i] + w2*e1;
e2=w1*e1 + w2*e2;
e3=w1*e2 + w2*e3;
e4=w1*e3 + w2*e4;
e5=w1*e4 + w2*e5;
e6=w1*e5 + w2*e6;
//
t3Array[i]=c1*e6 + c2*e5 + c3*e4 + c4*e3;
}
//----
return(0);
}
//+------------------------------------------------------------------+
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