Hi,
I'm sharing this indicator that I just finished, because it might be helpful for those who are following Laura's "Roadmap" thread.
This tool's main purpose if for backtesting. It has a few additional uses, in addition to the "TrendStrength RSI-MTF" that is used, but that's not the main purpose.
I created it simply because there was at some point a few questions / demands on the ability to have the Composite RSI for earlier candles (instead of just in real time).
My version plots the value of the RSI for all bars. It shows the value at the precise moment the bar was closed. So obviously, the very small variations that occur to the value of the MTF-RSI don’t show, but they are really marginal.
The MTF-RSI is simply the average of RSI(9) and RSI(2), for the H4, D1, and W1 timeframes.
On the “Roadmap” template, it’s the number that shows up on the upper right of the chart.
As a general guide, values above 55 indicate a bullish environment, and under 44 a bearish one.
How to use it for backtesting purposes?
The idea is, if you’re backtesting on choosing which channel cross or continuation setup (channel failure) to take, this indicator will give you the exact value of the RSI-MTF, to help gauge if the strength of the HTF trend supports your potential setup.
Of course, it’s not the only criteria, and for example much less important than general market structure, but it is a helping tool.
For example on this EURAUD chart, it can give more confidence in taking the channel cross on the right, the previous ones being more in the “dead zone” between 45-55.
I have added a setting for those who trade on smaller TFs / scalping. By default it's "Standard", but you can choose "Scalping":
The scalping version just takes the RSI(9) and RSI(2) of M15 and H1, and averages it. I know a few that follow Roadmap like to trade indices on M1 / tickchart with those settings.
The “Standard” is for use under H4. The “Scalping” version is for use under M15.
Of course, one can play with the possibilities and display the 2 versions. RSI Standard going below 45 with confluence on “Scalping” being under 45 can be interesting.
Or, continuation trades could be taken when the Scalping version goes above 45, then drop back below while Standard still under 45 (i.e., a pullback setup). Or any other combination. Those are not Roadmap rules, but it’s always nice to explore.
I have added the possibility to be alerted when a bar closes above / below the 45/55 level (by default off).
Finally, I re-iterate that the main reason is to go back to your chart to see if you would have taken a channel setup. In real time, it’s just the same value as the RSI-MTF number on the upper right, so in terms of screen real-estate it’s better just to keep the other one.
Please report any bugs.
Enjoy,
I'm sharing this indicator that I just finished, because it might be helpful for those who are following Laura's "Roadmap" thread.
This tool's main purpose if for backtesting. It has a few additional uses, in addition to the "TrendStrength RSI-MTF" that is used, but that's not the main purpose.
I created it simply because there was at some point a few questions / demands on the ability to have the Composite RSI for earlier candles (instead of just in real time).
My version plots the value of the RSI for all bars. It shows the value at the precise moment the bar was closed. So obviously, the very small variations that occur to the value of the MTF-RSI don’t show, but they are really marginal.
The MTF-RSI is simply the average of RSI(9) and RSI(2), for the H4, D1, and W1 timeframes.
On the “Roadmap” template, it’s the number that shows up on the upper right of the chart.
As a general guide, values above 55 indicate a bullish environment, and under 44 a bearish one.
How to use it for backtesting purposes?
The idea is, if you’re backtesting on choosing which channel cross or continuation setup (channel failure) to take, this indicator will give you the exact value of the RSI-MTF, to help gauge if the strength of the HTF trend supports your potential setup.
Of course, it’s not the only criteria, and for example much less important than general market structure, but it is a helping tool.
For example on this EURAUD chart, it can give more confidence in taking the channel cross on the right, the previous ones being more in the “dead zone” between 45-55.
I have added a setting for those who trade on smaller TFs / scalping. By default it's "Standard", but you can choose "Scalping":
The scalping version just takes the RSI(9) and RSI(2) of M15 and H1, and averages it. I know a few that follow Roadmap like to trade indices on M1 / tickchart with those settings.
The “Standard” is for use under H4. The “Scalping” version is for use under M15.
Of course, one can play with the possibilities and display the 2 versions. RSI Standard going below 45 with confluence on “Scalping” being under 45 can be interesting.
Or, continuation trades could be taken when the Scalping version goes above 45, then drop back below while Standard still under 45 (i.e., a pullback setup). Or any other combination. Those are not Roadmap rules, but it’s always nice to explore.
I have added the possibility to be alerted when a bar closes above / below the 45/55 level (by default off).
Finally, I re-iterate that the main reason is to go back to your chart to see if you would have taken a channel setup. In real time, it’s just the same value as the RSI-MTF number on the upper right, so in terms of screen real-estate it’s better just to keep the other one.
Please report any bugs.
Enjoy,
