[blackcat] L3 Inverted VixFix Indicator with RSI Scaling

20 de set. de 2023

This pine script that creates a custom indicator called the Inverted VixFix Indicator with RSI Scaling. This indicator combines two well-known technical indicators - the VixFix and the RSI - to create a more comprehensive view of market conditions.

The VixFix is a technical indicator that helps identify market trends and volatility. It is based on the highest close of the past 22 bars and the lowest low of the same period. The VixFix is calculated as 100 times the difference between the highest close and the current low divided by the highest close. The indicator is inverted, meaning that high values indicate low volatility and low values indicate high volatility.

The RSI (Relative Strength Index) is a momentum indicator that measures the strength of price action in a given period. It is calculated based on the closing prices of the selected asset. The RSI is scaled to a range between 0 and 100, with values above 70 indicating overbought conditions and values below 30 indicating oversold conditions.

The Inverted VixFix Indicator with RSI Scaling combines these two indicators to give a more comprehensive view of market conditions. The RSI is first scaled to a range between 0 and 100 using the RSI Length, RSI Overbought, and RSI Oversold inputs. The Inverted VixFix is then scaled to the same range as the RSI using the RSI Overbought and RSI Oversold inputs. The two indicators are then combined to create the Inverted VixFix Indicator with RSI Scaling.

To smooth out the RSI, the script also uses the ALMA (Arnaud Legoux Moving Average) function. This function is a type of moving average that uses a variable smoothing factor to give more weight to recent price action. In this script, the ALMA is applied to the scaled RSI with a length of 3, a offset of 0.58, and a sigma of 6.

To help visualize the indicator, the script also creates visual elements such as threshold lines and fills. The Bull Threshold line is drawn at the RSI Overbought level and the Bear Threshold line is drawn at the RSI Oversold level. A fill is then created between these two lines using the color purple and opacity set to 70%.

Overall, the Inverted VixFix Indicator with RSI Scaling is a useful tool for traders looking for a more comprehensive view of market conditions. By combining the VixFix and RSI indicators, this script provides a more nuanced view of market trends and volatility.

25 de abr.

Notas de Lançamento

OVERVIEW
The [blackcat] L3 Inverted VixFix Indicator with RSI Scaling combines the volatility insights of the VixFix indicator with the momentum analysis provided by the Relative Strength Index (RSI). This unique blend offers traders a comprehensive view of market conditions, helping them identify potential buy and sell opportunities more effectively. The indicator scales both VixFix and RSI values and applies smoothing techniques for clearer signals 📊✅.

FEATURES

Calculates key components:
Highest Close Price: Highest closing price over a specified period.
Lowest Low Price: Lowest low price over a specified period.
VixFix Value: Measures volatility based on the range between highest closes and lowest lows.
RSI Value: Indicates momentum and overbought/oversold conditions.
Scales VixFix and RSI values for better alignment and comparison.
Applies Adaptive Linear Moving Average (ALMA) smoothing to the scaled RSI values for enhanced clarity.
Plots the following elements on the chart:
Scaled VixFix Value: Blue line representing inverted and scaled VixFix values.
Smoothed RSI Scaled Value: Yellow line showing smoothed and scaled RSI values.
Overbought Level: Red horizontal line at the user-defined overbought threshold.
Oversold Level: Green horizontal line at the user-defined oversold threshold.
Filled Area: Purple shaded region between overbought and oversold levels for visual context.
HOW TO USE

Add the indicator to your TradingView chart by selecting it from the indicators list.
Adjust the input parameters as needed:
VixFix Length: Number of bars considered for calculating the highest close and lowest low prices.
RSI Length: Period used for RSI calculation.
Overbought/Oversold Levels: Define thresholds for identifying extreme market conditions.
ALMA Parameters: Fine-tune the smoothing applied to the scaled RSI values.
Observe the plotted lines and filled areas to gauge market sentiment and potential reversal points.
Use the combined insights from VixFix and RSI for informed trading decisions.
LIMITATIONS

The indicator's effectiveness may vary depending on the asset and timeframe being analyzed.
Users should combine this indicator with other forms of analysis for more reliable trading decisions.
False signals can occur in highly volatile or ranging markets 🌪️.
NOTES

Ensure that you have sufficient historical data available for accurate calculations.
Test the indicator thoroughly on demo accounts before applying it to live trading 🔍.
Customize the appearance and parameters as needed to fit your trading strategy.