Mxwll Capital - Mxwll RSI
Hi!
The Mxwll RSI offers an improved overhaul of the RSI calculation. Consequently, while the scaling remains similar, the Mxwll RSI generates a smoother output, diminished lag, and less confusion as to the general direction of the trend and its inherent counter trend trading opportunities.
Features
How It Works
The Mxwll RSI uses a variation of the popular HMA and a variation of the popular OBV to generate signals. This indicator can be used exactly like traditional RSI; however, with improved accuracy, smoothness, and less extreme signal lag.
Essentially, Mxwll RSI normalizes and smooths OBV and uses the calculation as a factor for a volume weighted RSI. From there, Mxwll RSI is further smoothed with a variation of the Hull Moving Average. The final result produces a greatly-improved variation of the traditional RSI.
The lower the negative value for Mxwll RSI the greater bearish intensity and, consequently, the greater likelihood of a counter trend trading opportunity. Conversely, the higher the value for Mxwll RSI the greater the bullish intensity, with an improved likelihood of bullish exhaustion.
The Mxwll RSI is designed for counter trend trading. The indicator should be used to identify bullish/bearish exhaustion and anticipate an eventual reversion.
Settings
Timeframe: Mxwll RSI is multi timeframe compatible. Use this setting to control what timeframe the Mxwll RSI is calculated for.
Mxwll HMA Length: This setting controls the lookback period for the Mxwll HMA. The Mxwll HMA is an improved variation of the traditional Hull Moving Average. This setting allows controls the relative speed and smoothness of the Mxwll RSI. Higher values result in a smoother output with slightly less speed, with the overall compromise being negligible.
Mxwll RSI Period: This setting controls the relative smoothness of Mxwll RSI - similar to the RSI length setting for traditional RSI. However, the traditional RSI length setting largely controls signal output for the traditional RSI. Higher values result in little-to-no signal generation. This is not the case with Mxwll RSI. The Mxwll RSI Period can be increased for improved smoothness with little-to-no impact on signal output. This allows you to have a smoother, cleaner Mxwll RSI that still identifies counter trend trading opportunities.
How to analyze markets with the Mxwll RSI
The Mxwll RSI can be traded and used for analysis similarly to traditional RSI.
How to counter trend trade with Mxwll RSI
The Mxwll RSI has a distinct oversold region of -20 and an overbought region of 20. Further, an extremely oversold region of -35 and an extremely overbought region of 35 are included. Extremely oversold or overbought values reflect extreme price upwards/downwards price movement.
A counter trend trading opportunity is highlighted by a downwards red arrow for bearish and an upwards green arrow for bullish.
Values greater than the overbought region correspond to bullish intensity, while values greater than the extremely overbought region correspond to extreme bullish intensity. Similarly, values less than the oversold region correspond to extreme bearish intensity, while values less than the extremely oversold region correspond to extreme bearish intensity
All instances, particularly extremely overbought or extremely oversold Mxwll RSI, should prepare the user for a counter trend trading opportunity; the nail in the coffin being a green or red arrow to highlight precise entry points.
What makes Mxwll RSI better than traditional RSI
The image above details several advantages of Mxwll RSI over traditional RSI.
1. Smooth output during a trend, regardless of intensity.
Mxwll RSI sustains the primary direction of the trend; no choppy output. In real time, the general direction of RSI can be confusing, with rapid fluctuations being difficult to interpret. The Mxwll RSI is designed to maintain its output in the direction of the trend until a relatively considerable reversion occurs.
2. Clear real time analysis
The Mxwll RSI is easy to interpret in real time trading.
Green = relative uptrend
Red = relative downtrend
During a relative uptrend Mxwll RSI will not fluctuate downwards. During a relative downtrend Mxwll RSI will not fluctuate upwards. This advantage allows for clearer interpretability during realtime trading, with no confusion as to what the primary direction of the trend is and when a counter trend trading opportunity has been presented.
3. Improved signal output
Traditional RSI moves slow and rough, with only extreme price moves generating a signal for a counter trend trading opportunity. The Mxwll RSI does not suffer from this disadvantage. Relativity is better accounted for, with counter trend trading opportunities being presented during both small and large trends.
The importance of volume and OBV for the Mxwll RSI
Mxwll RSI largely considered price movement for its calculation; however, price movement doesn’t tell the entire story. By normalizing OBV and accounting for volume, the Mxwll RSI better scales with relativity and order flow. Price moves with high volume have a greater impact on the output for Mxwll RSI, and the general direction of Mxwll RSI is bound to reverse sooner if a significant counter trend move occurs with high volume. This feature allows for quicker signal output for counter trend trading.
More improvements to come; stay tuned and thank you for checking this out.
The Mxwll RSI offers an improved overhaul of the RSI calculation. Consequently, while the scaling remains similar, the Mxwll RSI generates a smoother output, diminished lag, and less confusion as to the general direction of the trend and its inherent counter trend trading opportunities.
Features
- Overbought and Oversold Regions
- Bull and Bear Entry Points
- Multi-Timeframe
- Smooth
- Diminished Lag
- Improved Accuracy
- Scales with relativity
- Accounts for volume
How It Works
The Mxwll RSI uses a variation of the popular HMA and a variation of the popular OBV to generate signals. This indicator can be used exactly like traditional RSI; however, with improved accuracy, smoothness, and less extreme signal lag.
Essentially, Mxwll RSI normalizes and smooths OBV and uses the calculation as a factor for a volume weighted RSI. From there, Mxwll RSI is further smoothed with a variation of the Hull Moving Average. The final result produces a greatly-improved variation of the traditional RSI.
The lower the negative value for Mxwll RSI the greater bearish intensity and, consequently, the greater likelihood of a counter trend trading opportunity. Conversely, the higher the value for Mxwll RSI the greater the bullish intensity, with an improved likelihood of bullish exhaustion.
The Mxwll RSI is designed for counter trend trading. The indicator should be used to identify bullish/bearish exhaustion and anticipate an eventual reversion.
Settings
Timeframe: Mxwll RSI is multi timeframe compatible. Use this setting to control what timeframe the Mxwll RSI is calculated for.
Mxwll HMA Length: This setting controls the lookback period for the Mxwll HMA. The Mxwll HMA is an improved variation of the traditional Hull Moving Average. This setting allows controls the relative speed and smoothness of the Mxwll RSI. Higher values result in a smoother output with slightly less speed, with the overall compromise being negligible.
Mxwll RSI Period: This setting controls the relative smoothness of Mxwll RSI - similar to the RSI length setting for traditional RSI. However, the traditional RSI length setting largely controls signal output for the traditional RSI. Higher values result in little-to-no signal generation. This is not the case with Mxwll RSI. The Mxwll RSI Period can be increased for improved smoothness with little-to-no impact on signal output. This allows you to have a smoother, cleaner Mxwll RSI that still identifies counter trend trading opportunities.
How to analyze markets with the Mxwll RSI
The Mxwll RSI can be traded and used for analysis similarly to traditional RSI.
How to counter trend trade with Mxwll RSI
The Mxwll RSI has a distinct oversold region of -20 and an overbought region of 20. Further, an extremely oversold region of -35 and an extremely overbought region of 35 are included. Extremely oversold or overbought values reflect extreme price upwards/downwards price movement.
A counter trend trading opportunity is highlighted by a downwards red arrow for bearish and an upwards green arrow for bullish.
Values greater than the overbought region correspond to bullish intensity, while values greater than the extremely overbought region correspond to extreme bullish intensity. Similarly, values less than the oversold region correspond to extreme bearish intensity, while values less than the extremely oversold region correspond to extreme bearish intensity
All instances, particularly extremely overbought or extremely oversold Mxwll RSI, should prepare the user for a counter trend trading opportunity; the nail in the coffin being a green or red arrow to highlight precise entry points.
What makes Mxwll RSI better than traditional RSI
The image above details several advantages of Mxwll RSI over traditional RSI.
1. Smooth output during a trend, regardless of intensity.
Mxwll RSI sustains the primary direction of the trend; no choppy output. In real time, the general direction of RSI can be confusing, with rapid fluctuations being difficult to interpret. The Mxwll RSI is designed to maintain its output in the direction of the trend until a relatively considerable reversion occurs.
2. Clear real time analysis
The Mxwll RSI is easy to interpret in real time trading.
Green = relative uptrend
Red = relative downtrend
During a relative uptrend Mxwll RSI will not fluctuate downwards. During a relative downtrend Mxwll RSI will not fluctuate upwards. This advantage allows for clearer interpretability during realtime trading, with no confusion as to what the primary direction of the trend is and when a counter trend trading opportunity has been presented.
3. Improved signal output
Traditional RSI moves slow and rough, with only extreme price moves generating a signal for a counter trend trading opportunity. The Mxwll RSI does not suffer from this disadvantage. Relativity is better accounted for, with counter trend trading opportunities being presented during both small and large trends.
The importance of volume and OBV for the Mxwll RSI
Mxwll RSI largely considered price movement for its calculation; however, price movement doesn’t tell the entire story. By normalizing OBV and accounting for volume, the Mxwll RSI better scales with relativity and order flow. Price moves with high volume have a greater impact on the output for Mxwll RSI, and the general direction of Mxwll RSI is bound to reverse sooner if a significant counter trend move occurs with high volume. This feature allows for quicker signal output for counter trend trading.
More improvements to come; stay tuned and thank you for checking this out.