Adaptive Strength Overlay (MTF) [BackQuant]

Adaptive Strength Overlay (MTF) [BackQuant]
A multi-timeframe RSI strength visualizer that projects oscillator “pressure” directly onto price using adaptive gradient fills between percent bands. Built to make strength, exhaustion, and regime context readable at a glance, without needing to stare at a separate oscillator panel.

Mean-Reversion mode example

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What this indicator does
This indicator converts RSI strength into a chart overlay that reacts to momentum and extremes, then visualizes it as colored “pressure zones” around price.

Instead of plotting RSI in a sub-window, it:

• Builds 1 to 3 symmetric percent bands above and below price.
  
• Computes RSI strength on up to 3 different timeframes (MTF).
  
• Smooths RSI with your selected moving average type.
  
• Maps RSI values into discrete transparency “buckets”.
  
• Fills between the bands with a gradient whose opacity reflects strength or exhaustion.
  
• Displays a compact RSI table for all enabled timeframes.
  
• Provides alert conditions for extremes and midline shifts on each timeframe.
  

The result is an overlay that looks like a dynamic envelope. When strength rises, the envelope “lights up” in the direction of the move. When strength becomes stretched, the outer zones become visually prominent.

Core idea: “Strength as an overlay”
RSI is normally interpreted in a separate oscillator panel. That makes context-switching slow:

• You check price action.
  
• You look down at RSI.
  
• You mentally translate RSI into risk or trend bias.
  

This script removes that translation step by projecting strength directly onto the price area, using band fills as a visual language:

• More visible fill = stronger strength or more extreme condition (depending on mode).
  
• Less visible fill = weak strength or neutral state.
  

Two operating modes

1) Trend mode
Trend mode emphasizes strength aligned with direction:

• When RSI is strong on the upside, upper bands become more visible.
  
• When RSI is strong on the downside, lower bands become more visible.
  
• Neutral RSI fades, so the chart de-clutters during chop.
  

Use Trend mode when:

• You want a clean trend-following overlay.
  
• You want to quickly see which timeframe(s) are powering the move.
  
• You want to filter entries to moments when strength confirms direction.
  

2) Mean-Reversion mode
Mean-Reversion mode flips the emphasis to highlight exhaustion against the move:

• Upper extremes become a “potential exhaustion” cue.
  
• Lower extremes become a “potential exhaustion” cue.
  
• The overlay is tuned to make stretched conditions obvious.
  

This is not an automatic “short overbought / long oversold” system. It is a visualization mode that makes “extended” conditions stand out faster, especially when multiple timeframes align.

How the bands work (Percent Bands)
The indicator constructs up to three symmetric envelopes around price:

• Band 1: percent1 scaled by scale
  
• Band 2: percent2 scaled by scale (optional)
  
• Band 3: percent3 scaled by scale (optional)
  

The percent bands are simple deviations from the selected price source:

• Upper = price * (1 + (percent * scaling)/100)
  
• Lower = price * (1 - (percent * scaling)/100)
  

Why this matters:

• It anchors “strength visualization” to meaningful price distance.
  
• It makes the overlay comparable across assets because it’s percent-based.
  
• It gives you a consistent spatial frame for reading momentum versus extension.
  

Multi-timeframe engine (MTF)
The script runs the same strength calculation on up to three timeframes:

• Timeframe 1 uses the chart timeframe by default (empty string input).
  
• Timeframe 2 is optional and defaults to Daily.
  
• Timeframe 3 is optional and defaults to Weekly.
  

Each timeframe has:

• Its own RSI period (len, len2, len3).
  
• Its own smoothing length (slen, slen2, slen3).
  
• The same smoothing type selection (EMA, HMA, etc).
  

This creates a layered view:

• TF1 often reflects tactical pressure (entries/exits).
  
• TF2 reflects structural pressure (swing context).
  
• TF3 reflects macro bias (regime context).
  

When multiple timeframes agree, the fills stack and the overlay becomes visually louder. When they disagree, the overlay looks mixed or muted, which is exactly the point.

Smoothing options (why so many)
Raw RSI can be noisy. This script lets you smooth RSI with multiple MA types, which changes how “responsive” the overlay feels:

• EMA/RMA smooth without lagging as hard as SMA.
  
• HMA responds faster but can be twitchy.
  
• LINREG can feel more “structural”.
  
• ALMA and T3/TEMA provide heavier smoothing profiles with different lag characteristics.
  

This isn’t cosmetic. Your smoothing choice affects:

• How early the overlay “lights up” in Trend mode.
  
• How long extremes remain highlighted in Mean-Reversion mode.
  
• How often fills flicker in chop.
  

Strength mapping (the transparency buckets)
Instead of mapping RSI to a continuous color scale, the script uses a discrete transparency ladder. That creates a clean, readable visual that avoids constant flickering.

The logic assigns two transparency values per timeframe:

• Upper-side transparency responds to lower RSI zones (weak upside strength).
  
• Lower-side transparency responds to higher RSI zones (strong upside strength).
  

Then the script uses those transparencies differently depending on mode:

• Trend mode shows “strength aligned with direction”.
  
• Mean-Reversion mode swaps the emphasis so “extremes” stand out as potential stretch.
  

You can think of it as:

• Trend mode highlights continuation strength.
  
• Mean-Reversion mode highlights potential exhaustion.
  

Fill stacking (how the overlay is built)
The overlay uses layered fills:

• Fill from price to Band 1
  
• Fill from Band 1 to Band 2 (if enabled)
  
• Fill from Band 2 to Band 3 (if enabled)
  

Upper side uses the negative color (typically red) and lower side uses the positive color (typically green), because upper bands represent “above price” space and lower bands represent “below price” space. The intensity is controlled by the computed transparency per timeframe and selected mode.

Important behavior:

• Disabling Band 2 or Band 3 can change how the stacked fills look, because you are removing fill segments.
  
• If you want a clean look, run only Band 1.
  
• If you want a “regime heat” look, run Bands 1–3 with higher scaling.
  

Table (MTF RSI dashboard)
A compact table prints RSI values for each configured timeframe:

• Row labels show TF.
  
• Values show the smoothed RSI output that drives the overlay.
  

Use it for quick confirmation:

• If overlay looks strong but table RSI is neutral, your band settings might be too tight.
  
• If TF3 RSI is extreme while TF1 is neutral, you are likely in a macro stretched regime with local consolidation.
  

Alerts (built-in)
Alerts are provided for each timeframe separately, covering:

• Entering upper extreme (cross above 70)
  
• Exiting upper extreme (cross below 70)
  
• Entering lower extreme (cross below 30)
  
• Exiting lower extreme (cross above 30)
  
• Bullish midline cross (cross above 50)
  
• Bearish midline cross (cross below 50)
  

This enables workflows like:

• Notify when TF2 enters extreme, then wait for TF1 mean-reversion confirmation.
  
• Notify when TF3 crosses midline, then only take TF1 trend setups in that direction.
  

How to use it (practical reads)

Trend mode reads

• Strong continuation: TF1 and TF2 fills become clearly visible on the same side.
  
• Healthy pullback: TF1 fades but TF2 stays visible, suggesting underlying structure remains strong.
  
• Chop warning: fills alternate or remain mostly invisible, indicating neutral strength.
  

Mean-Reversion mode reads

• Exhaustion zones: outer fills become prominent near the extremes, signaling stretched conditions.
  
• Compression after extreme: fill fades while price stabilizes, suggesting “cooling off” rather than immediate reversal.
  
• Multi-TF stretch: TF2 and TF3 extremes together often mark higher significance zones.
  

Recommended setup presets

Preset A: Clean trend overlay

• Mode: Trend
  
• Bands: only Band 1
  
• Scale: 1–2
  
• Smoothing: EMA, moderate slen (6–10)
  
• TF2: Daily on intraday charts
  

Preset B: Regime and exhaustion mapper

• Mode: Mean-Reversion
  
• Bands: Bands 1–3
  
• Scale: 2–4
  
• Smoothing: T3 or RMA, slightly higher slen
  
• TF2: Daily, TF3: Weekly
  

Limitations

• This is a strength visualization tool, not a full entry/exit system.
  
• Percent bands are not volatility-adjusted, they are distance frames. In very high vol conditions, you may need higher band percentages or higher scaling.
  
• MTF values update on their own timeframe closes, so higher timeframes will step rather than update every bar.