[blackcat] L2 Ehlers Rocket RSI Indicator

21 dic 2020

Level: 2

Background

John F. Ehlers introuced Rocket RSI Indicator in May, 2018.

Function

In “RocketRSI—A Solid Propellant For Your Rocket Science Trading” in May, 2018, John Ehlers introduces a new take on the classic RSI indicator originally developed by J. Welles Wilder. Ehlers begins by introducing a new version of the RSI based on a simple accumulation of up and down closes rather than averages. To this he applies a Fisher transform. He tells us that the resultant output is statistically significant spikes that indicate cyclic turning points with precision.

With this indicator, overbought and oversold conditions are clear:
## Oversold Entry Condition: Indicator crosses value (RocketRSI crosses over -2.00)
## Overbought Exit Condition: Indicator crosses value (RocketRSI crosses under 2.00)

Note the used “crosses under 2.00” for the exit condition, rather than “crosses above 2.00.” This lets the winning positions ride further, and resulted in a better overall return in backtesting.

Key Signal

RocketRSI --> Ehlers Rocket RSI Indicator fast line
Trigger --> Ehlers Rocket RSI Indicator slow line


Pros and Cons

100% John F. Ehlers definition translation, even variable names are the same. This help readers who would like to use pine to read his book.

Remarks

The 90th script for Blackcat1402 John F. Ehlers Week publication.


Readme

In real life, I am a prolific inventor. I have successfully applied for more than 60 international and regional patents in the past 12 years. But in the past two years or so, I have tried to transfer my creativity to the development of trading strategies. Tradingview is the ideal platform for me. I am selecting and contributing some of the hundreds of scripts to publish in Tradingview community. Welcome everyone to interact with me to discuss these interesting pine scripts.

The scripts posted are categorized into 5 levels according to my efforts or manhours put into these works.

Level 1 : interesting script snippets or distinctive improvement from classic indicators or strategy. Level 1 scripts can usually appear in more complex indicators as a function module or element.

Level 2 : composite indicator/strategy. By selecting or combining several independent or dependent functions or sub indicators in proper way, the composite script exhibits a resonance phenomenon which can filter out noise or fake trading signal to enhance trading confidence level.

Level 3 : comprehensive indicator/strategy. They are simple trading systems based on my strategies. They are commonly containing several or all of entry signal, close signal, stop loss, take profit, re-entry, risk management, and position sizing techniques. Even some interesting fundamental and mass psychological aspects are incorporated.

Level 4 : script snippets or functions that do not disclose source code. Interesting element that can reveal market laws and work as raw material for indicators and strategies. If you find Level 1~2 scripts are helpful, Level 4 is a private version that took me far more efforts to develop.

Level 5 : indicator/strategy that do not disclose source code. private version of Level 3 script with my accumulated script processing skills or a large number of custom functions. I had a private function library built in past two years. Level 5 scripts use many of them to achieve private trading strategy.

21 dic 2020

Note di rilascio

Add buy and sell alerts.

16 apr

Note di rilascio

OVERVIEW This indicator implements Ehlers' Rocket RSI strategy using a Super Smoother filter and Fisher Transform calculations. It provides trading signals through visual alerts and labels when specific crossover conditions are met.
FEATURES
• Advanced RSI calculation incorporating Ehlers' methodology
• Visual plotting of Rocket RSI and Trigger lines
• Automatic BUY/SELL labels with corresponding market colors
• Customizable input parameters for adaptability
• Integrated alert system for real-time notifications

HOW TO USE

Input Parameters:
• Price: Select the base price for calculations (default: hl2)
• SmoothLength: Set the smoothing period (default: 10)
• RSILength: Define the RSI calculation period (default: 10)
• OBOSLevel: Adjust the overbought/oversold threshold (default: 2)

Interpretation:
• Monitor Rocket RSI line crossing above/below the Trigger line
• Watch for crosses with ±2.0 horizontal lines
• Green labels indicate buy signals
• Red labels indicate sell signals

LIMITATIONS
• Performance depends on selected input parameters
• Past performance does not guarantee future results
• May generate false signals during volatile markets

NOTES
• Uses Super Smoother filter for enhanced price filtering
• Fisher Transform applies non-linear scaling to RSI values
• Horizontal lines at ±2.0 serve as additional signal triggers