This indicator is a tool designed to be used with Steven Hart's RSI Exhaustion strategy. For more information google TheTradingChannel or look him up on YouTube :)
The default RSI settings for this strategy are:
RSI Overbought: 80
RSI Oversold: 20
When the RSI gets above 80, the line will turn red and the script will begin looking for a specific type...
The purpose of this script is to trade with the trend, trade trend continuation, and counter-trend trades.
Uptrend is price above 200 ema: Background is green and the bar colors are normal
Downtrend is price below 200 ema: Background is red and the bar colors are normal
Counter-trend to uptrend--Bar colors are white and the background is purple
Based on "How Naked Trading Works" video by Walter Peters: youtu.be. I don't know this person and I am in no way affiliated with him. I just found his video interesting enough to make this into a script.
Rules as described by Walter in his video:
1. if current candle makes a higher high than the previous one
2. and is a bearish...
"Broadly speaking, if the market is advancing as part of a bullish
TD D-Wave up sequence, then the RSI should remain above 40
during corrective setbacks for TD D-Waves 2 and 4.
Similarly, if the market is declining as part of a bearish TD D-Wave
down sequence, then the RSI should remain beneath 60 during
corrective rallies for TD D-Waves 2 and 4" - Demark...