RSI + MACD Confluence Indicator for ThinkorSwim

Shinthus

Shinthus

Member
VIP
Thanks to BenTen's assembling skills, I bring you this indicator. I haven't named it yet, but it revolves around the RSI coming up from O/S to 34 and coming down from O/B to 66.... while the MACD crosses at the same exact time. I got this idea from Chad Brinkman's Youtube channel. He is a day trader. Check out these 3 vids to get an idea of where this came from:


Here is what the indicator looks like





This works on all timeframes. You can edit the MACD lengths and RSI O/S and O/B levels as you please. The indicator came hot off the script plate from BenTen with standard MACD settings but as I backtested, I realized I needed something faster. I ended up using Chad's faster settings of 6,9,and13 for MACD. As for the RSI, it's my understanding that 34/66 or 35/65 levels are pretty much equal in terms of signal quality.

Please play around with this and post your thoughts here.

Indicator: http://tos.mx/wyPd1m

Code:
plot Data = close;
# MACD+RSI 34 Trading Indicator
# Assembled by BenTen at useThinkScript.com
# Concept shared by @Ohta via Discord
# You are free to use this code for personal use, and make derivative works from it. You are NOT GRANTED permission to use this code (or derivative works) for commercial purposes which includes and is not limited to selling, reselling, or packaging with other commercial indicators. Headers and attribution in this code should remain as provided, and any derivative works should extend the existing headers.

# RSI
input length = 14;
input price = close;
input over_Bought = 66;
input over_Sold = 34;
input RSIaverageType = AverageType.WILDERS;
def NetChgAvg = MovingAverage(RSIaverageType, price - price[1], length);
def TotChgAvg = MovingAverage(RSIaverageType, AbsValue(price - price[1]), length);
def ChgRatio = if TotChgAvg != 0 then NetChgAvg / TotChgAvg else 0;
def RSI = 50 * (ChgRatio + 1);
def OverSold = over_Sold;
def OverBought = over_Bought;

def RSIup = RSI crosses above OverSold;
def RSIdwn = RSI crosses below OverBought;

input fastLength = 6;
input slowLength = 9;
input MACDLength = 12;
input averageType = AverageType.EXPONENTIAL;

def Value = MovingAverage(averageType, close, fastLength) - MovingAverage(averageType, close, slowLength);
def Avg = MovingAverage(averageType, Value, MACDLength);

def Diff = Value - Avg;
def ZeroLine = 0;

def UpSignal = Diff crosses above ZeroLine;
def DwnSignal = Diff crosses below ZeroLine;

plot bullish = UpSignal and RSIup;
bullish.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_UP);
bullish.SetDefaultColor(Color.CYAN);
bullish.SetLineWeight(3);

plot bearish = DwnSignal and RSIdwn;
bearish.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_DOWN);
bearish.SetDefaultColor(Color.CYAN);
bearish.SetLineWeight(3);
 
Last edited by a moderator:
H

horserider

Well-known member
VIP
Warehouse
Ok sorry to be critical of this indicator. Good job putting it together. I do not think that guy in the video understands the RSI and MACD. He is putting together two indicators measuring the same thing. Just the calculations differ. So the AH HA moment is both align . Of course they will as RSI is a first derivative of price and MACD a second. As Markos has said many times you do not want to use indicators showing the same information. The gentleman in the video has also done the same thing with the BB and Ichimoku.
Ok back to this indicator, my opinion is you will have a difficult time making the arrows work well. I think there are better indicators to use in making arrows. I have put several on this site already.
 
Shinthus

Shinthus

Member
VIP
Ok sorry to be critical of this indicator. Good job putting it together. I do not think that guy in the video understands the RSI and MACD. He is putting together two indicators measuring the same thing. Just the calculations differ. So the AH HA moment is both align . Of course they will as RSI is a first derivative of price and MACD a second. As Markos has said many times you do not want to use indicators showing the same information. The gentleman in the video has also done the same thing with the BB and Ichimoku.
Ok back to this indicator, my opinion is you will have a difficult time making the arrows work well. I think there are better indicators to use in making arrows. I have put several on this site already.
How are the BB and Ichimoku interpreted the same way?
 
H

horserider

Well-known member
VIP
Warehouse
@Shinthus I am going by what the guy describes in the video. If you notice where he picks support/resistance on ichi it is very close to the midline or outer band of BB. He picks that 9.35 level, so go count the ichi ahead and see when that level appears as to when he calls it. Looks like the ichi is still heading down. That level is also close to mid BB if I remember correctly. Easy to make a video after the fact but at least make sure what you describe has actually happened. Notice how he ignores the many arrows followed by a cross that go nowhere and sometimes trades before the cross. I guess my opinion is this is not a good strategy. As long as the RSI is below 50 the strength is weak and a bounce off the 50 is a possibility. If you can make it work then go for it.
 

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