In this script the RSI is used the limit number of displayed fractals to only those fractals that are triggered in the RSI Overbought and Oversold areas. This helps keep the chart cleaner looking when combined with other indicators so other icons that are plotted above and below candles are not covered up.
For example if the RSI drops below 30 the next fractal would be displayed. If the RSI stays below 30 each fractal would be displayed. If the RSI dips below 30 and returns above 30 before there is a fractal is displayed, the next valid fractal would still be displayed.
With optimization of the RSI values this indicator can be used in confluence with the included VWAP bands and Moving average to find trend reversal entry points for trades. Also recommended is to use a divergence identifying lower indicator as a secondary confirmation of trade entry.
Example of a potential long entry using the displayed chart. 1) RSI under 30 2) Price was recently outside of your chosen VWAP multiple. 3) a fractal was triggered.
Additionaly: 4) Use other indicators or other confluences for a stronger trade signal. 5) Use your preferred method of determining entry price stop loss and take profit.
NOTE: Fractals normally paint two bars behind the current bar. In this code, with the combination of the RSI and Fractal Trigger, the fractal paints an icon on the current bar.
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Minor update removed code for ATR that was used during back testing but was not essential to the indicator.
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The user defined Fractal triangles in blue and green have been moved to the top and bottom of the chart and a separate plotting of normal Fractals colored based on the RSI level has been added to the chart above and below the bars.
When the RSI is between 40 and 60 no fractals are posted. Lighter colored fractals are closer to a RSI value of 50 and darker fractals or further away from a RSI value of 50.
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Added two alert conditions for Potential Buy and Sell Signals.
Amazing work mate.. This indicator just proved itself perfectly with exit points to preserve my profits. Truly appreciate your work.
DudeBroBroDude
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I see I can set an alert for a "Buy" signal, but what exactly is considered a "Buy" signal? Is it a particular triangle color?
ABHIENN
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why it keeps repainting?
jamtigapagi
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Very useful indicator, william fractals itself is already a good indicator, but this one makes it more better by combining it with rsi, really a time saving and efficient