RSI & 5 EMA

RSI & 5 EMA Reversal Trading Indicator

📌 Category: Reversal Trading

🔹 Overview
This script is designed to identify potential reversal points using the Relative Strength Index (RSI) and the 5-Period Exponential Moving Average (EMA). It helps traders spot short-term exhaustion in price movements and provides clear entry signals when momentum shifts against the prevailing move.

🔹 How It Works
5-Period EMA (Blue Line):
Used to gauge short-term price direction.

RSI-Based Reversal Setup:
Helps filter trade setups to avoid false signals.

A buy preparation level is set when RSI is below 40, and the high is below the 5 EMA, indicating a potential oversold condition.
A sell preparation level is set when RSI is above 60, and the low is above the 5 EMA, signaling a possible overbought condition.

Reversal Entry Conditions:
A buy signal occurs if the price closes above the buy preparation level within the next 3 candles.
A sell signal occurs if the price closes below the sell preparation level within the next 3 candles.

Visual Enhancements:
Signal candles are highlighted with a white wick and border to make reversals easy to spot.
The 5 EMA is plotted in blue to track short-term trends.

🔹 How to Use This Indicator
✅ Best for traders looking to catch short-term reversals.
✅ Works well on 5-min, 15-min, 1-hour, and daily charts.
✅ Can be used in range-bound markets or at key support/resistance levels.

🔹 Customization Request
Even the conditions are met, no signal is plotted by this script. I will be very happy if anyone correct the script for better and accurate result.