One of the most powerful indicator based and divergence strategies i have ever seen was made by Constance Brown.
The Composite Index: The best way to think of the Composite Index as it applies to the RSI is to think of the RSI as Windows 3.0 and the Composite Index as Windows 10. Constance Brown discovered that the RSI, while it does create and detect divergences, does is not as accurate as it could be. It’s a bit of an oxymoron to say this but the RSI is a momentum indicator without any momentum calculation attached to it. The RSI actually misses a significant amount of important moves and even generates some bad moves. What Constance Brown did with the RSI is to input a momentum calculation within the RSI itself.
Usage: 1. Check hidden and regular divergences on RSI+COMPOSITE_INDEX and PRICE+COMPOSITE_INDEX. 2. After finding divergence wait for COMPOSITE_INDEX to cross under/over it's moving averages to trigger.
Useful Note: "RSI overbought/oversold as filter", "RSI and COMPOSITE_INDEX trendline as trigger", "RSI 50 Over/Under as trend direction detection", ... can be add to this strategy.
Enjoy!
Note di rilascio
⋅
Updated to Pine v4
Red trigger Line changed to orange
Horizontal range added to CI
Note di rilascio
⋅
- Bug fixed
Note di rilascio
⋅
Added trigger lines for RSI
Upgraded to pine v5
Note di rilascio
⋅
Updating the cover image
Note di rilascio
⋅
Modified the period of RSI moving averages
Added option to Enable/Disable RSI moving averages
@mrhashem, The script which you call as original is a copy of Constance Brown formula. In the first line I gave all credits to "Constance Brown".
kurohyo
⋅
@shayankm, can this be coded for trading with FXCM trading station platform?
Vijaykhanna
⋅
@shayankm I am using composit index for last 2 days and found it to be very useful, though I have not understood it properly ( I am senior citizen ). Can you please explain what is thick Red line and thin red and green lines? And also how does one correctly interpret. I am just following thick red line now.
shayankm
⋅
@Vijaykhanna,
Thick red line = Composite Index
Thin red line = Faster moving average on composite index
Thin green line = Slower moving average on composite index
Please read description of the indicator above.
ctrlg_78
⋅
shayan jan kash mishod ye video khoob farsi ham be soorate mokhtasar o mofid misakhtid o dakhele chanaletoon mizashtid
Chart_Professor
⋅
shayan jan aali bud. sepaas
great work dude. keep sharing such these awesome tools
shayankm
⋅
@mehrab90, mamnunam azize del
Thanks a lot, Hope it helps
PaulLucky
⋅
Amazing work ! Thank you for being so kind to share your genius work :)