I developed this ‘Composite’ RSI PIN indicator for trend traders (like me!). The composite RSI attempts to filter out the noise in the price data, whilst still being responsive and not too lagging. The PIN averages two relatively fast RSI signals across up to four timeframes H4, D1, W1 & MN. Smaller timeframes are not included because these add noise to the calculation and do no help determine the underlying trend.
Composite RSI Calculation Formula
To calculate the composite RSI, the PIN finds the average of the 2-period-RSI and the 9-period-RSI across all the selected timeframes (H4, D1, W1, MN). For example, when you select H4 and D1 timeframes, the calculation is RSI2(H4) + RSI9(H4) + RSI2(D1) + RSI9(D1) / 4. Because this is an average, the result is a value in the same range as a single RSI: zero to one-hundred. Similarly, a value below fifty indicates a bearish market and a value above fifty indicates bullish.
The RSI PIN does not display the value, but compares it to the Buy/Sell Thresholds and then displays an up/down arrow indicating the direction of the PIN signal.
JagzFX Composite RSI PIN Settings
The settings for the PIN are very straight forward:
- Include H4/D1/W1/MN in calculation. Selects which timeframes to include in the composite RSI.
- RSI Buy/Sell Threshold. Sets the level at which buy and sell signals will be output.
Download “JagzFX Composite RSI PIN v1.01”JagzFX_PIN_Composite_RSI_v1_02.ex4 – Downloaded 113 times – 45 KB