Honey-Momentum

Honey-Momentum is an all-in-one technical indicator designed to transform the standard Relative Strength Index (RSI) into a more readable, price-action-oriented tool. By converting RSI values into Candlesticks, this script allows traders to apply classic candlestick pattern analysis directly to momentum data, making it easier to identify trend exhaustion and high-probability reversals.
The "Honey" in the name refers to the script’s ability to filter out market noise and highlight the "sweet spots"—areas where momentum and price action diverge or reach critical extremes.
Key Features
• RSI Candlestick Visualization: Unlike a single line, these candles show the "Open, High, Low, and Close" of RSI within a specific lookback period. This helps identify internal strength or weakness that a simple line might hide.
• Automated Divergence Detection: The script automatically plots Regular Divergence (for trend reversals) and Hidden Divergence (for trend continuation) between price action and the RSI candles.
• Dynamic Smoothing: Includes a built-in smoothing engine (SMA, EMA, WMA, or RMA) to reduce volatility and provide a clearer view of the underlying momentum trend.
• Volatility-Scaled Channels: Features an optional RSI Channel that maps price volatility back onto the oscillator pane, helping you visualize where price is overextended relative to its RSI value.
• Visual Alert System: Integrated shapes and background highlights signal Overbought/Oversold crosses and Midline transitions.
How to Trade with Honey-Momentum
1. Exhaustion Trading (The Sweet Spot): Look for RSI Candles to close outside the 70/30 levels while a Regular Divergence line appears. This indicates a high-probability reversal zone.
2. Momentum Scalping: Use the Midline (50). When the RSI candles flip from red to green and cross above the 50-level, it signals a bullish momentum shift.
3. The "Honey" Filter: By enabling the Divergence Filter, the script will only show signals where the RSI peak is in extreme territory, reducing "fake-out" signals in ranging markets.
Settings Breakdown
• RSI Length: Adjust the lookback period (Default: 14).
• Smoothing: Toggle between raw RSI or a smoothed version for a "honey-smooth" trend line.
• Divergence Length: Controls the sensitivity of pivot detection for divergence.
• Scale Open: A specialized calculation that aligns the candle "Open" with the previous "Close" for a more traditional candlestick feel.
Disclaimer
This indicator is for educational and technical analysis purposes only. No trading strategy is 100% accurate. Always use proper risk management and stop-losses.
Pro-Tip for the Publication:
When you publish, make sure your Chart Layout looks clean. I recommend:
1. Hiding the price candles or making them faint so the Divergence Lines on the chart stand out.
2. Setting the indicator pane to be about 30–40% of the screen height.