The RCCO is simply the plot of the values of both the and added together.
The RCCO makes some adjustments though, so that both the and the will fit correctly on the same scale - and so that these adjustments for scale allow reversals to be detected at crossings.
When the crosses from underneath to up above the , this is usually a reversal. Alternatively, when the crosses from above to back under the , that usually signals a . Look for the widest swings you can find to ensure good momentum. The larger the , the clearer and more decisive the trends. Low will lead to ranging and lazy momentum. High will create clear and forceful trends. The lowest negative RCCO in a timeframe, and then add some high ... and you have yourself a good setup for a successful trade.
Because the and are adjusted, you may not recognize their values from having used the respective indicators on their own. The and values are less important. What matters with this indicator are the crossings and the RCCO value. The RCCO value should be negative, preferably, a deeply negative value. Look at the historical chart for the target per your selected timeframe and decide what values work for you.
I hope you enjoy the RCCO and that it can help you become a little más RICO!
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.