OPEN-SOURCE SCRIPT
RSI Trend Authority [JOAT]
RSI Trend Authority - VAR-RSI with OTT Trend Detection System
Introduction
RSI Trend Authority is an open-source overlay indicator that combines Variable Index Dynamic Average (VAR) smoothed RSI with the Optimized Trend Tracker (OTT) to create a complete trend detection and signal generation system. Unlike traditional RSI which oscillates in a separate pane, this indicator scales the RSI to price and overlays it directly on your chart, making trend analysis more intuitive.
The indicator generates clear BUY and SELL signals when the smoothed RSI crosses the OTT trailing stop line, providing actionable entry points with trend confirmation.
Originality and Purpose
This indicator is NOT a simple mashup of RSI and moving averages. It is an original implementation that transforms RSI into a trend-following overlay system:
How the components work together:
Core Components
1. VAR-RSI (Variable Index Dynamic Average RSI)
The foundation of this indicator is the VAR smoothing algorithm applied to RSI. VAR is an adaptive moving average that adjusts its smoothing factor based on the Chande Momentum Oscillator principle:
Pine Script®
This creates an RSI that:
2. OTT (Optimized Trend Tracker)
The OTT acts as a dynamic trailing stop that follows the VAR-RSI:
When VAR-RSI crosses above OTT, a bullish trend is confirmed. When VAR-RSI crosses below OTT, a bearish trend is confirmed.
3. Price Scaling
The RSI (0-100 scale) is converted to price scale using:
Pine Script®
This allows the indicator to overlay directly on price, showing how momentum relates to actual price levels.
Visual Components
VAR-RSI Line (Cyan/Magenta)
The main indicator line with gradient coloring:
OTT Line (Yellow Circles)
The trailing stop line displayed as circles:
Trend Fill
The area between VAR-RSI and OTT is filled:
Buy position and LONG on Dashboard with a Uptrend:
ATR Boundaries (Optional)
Dotted lines showing volatility-based price boundaries:
Buy/Sell Signals
Clear labels appear at signal points:
Bar Coloring
Optional feature that colors price bars:
Dashboard Panel
The 8-row dashboard provides comprehensive status information:
Input Parameters
RSI Settings:
VAR Settings:
OTT Settings:
ATR Trend Boundaries:
Display Options:
Color Scheme:
How to Use RSI Trend Authority
Signal-Based Trading:
Trend Confirmation:
Using the Dashboard:
ATR Boundaries:
Parameter Optimization
For Faster Signals:
For Smoother Signals:
For Tighter Stops:
For Wider Stops:
Alert Conditions
Three alert conditions are available:
Understanding the OTT Calculation
The OTT uses a percentage-based trailing mechanism:
Pine Script®
This ensures the trailing stop only moves in the direction of the trend, never against it.
Best Practices
Limitations
Technical Notes
This indicator is written in Pine Script v6 and uses:
The source code is open and available for review and modification.
Disclaimer
This indicator is provided for educational and informational purposes only. It is not financial advice. Trading involves substantial risk of loss. Past performance does not guarantee future results. Always conduct your own analysis and use proper risk management.
-Made with passion by officialjackofalltrades
Introduction
RSI Trend Authority is an open-source overlay indicator that combines Variable Index Dynamic Average (VAR) smoothed RSI with the Optimized Trend Tracker (OTT) to create a complete trend detection and signal generation system. Unlike traditional RSI which oscillates in a separate pane, this indicator scales the RSI to price and overlays it directly on your chart, making trend analysis more intuitive.
The indicator generates clear BUY and SELL signals when the smoothed RSI crosses the OTT trailing stop line, providing actionable entry points with trend confirmation.
Originality and Purpose
This indicator is NOT a simple mashup of RSI and moving averages. It is an original implementation that transforms RSI into a trend-following overlay system:
- Why VAR Smoothing? Traditional RSI is noisy and produces many false signals. The Variable Index Dynamic Average (VAR) is an adaptive smoothing algorithm based on the Chande Momentum Oscillator principle. It adjusts its smoothing factor based on market conditions - responding quickly during trends and smoothing out during choppy markets. This creates an RSI that filters noise while preserving genuine momentum shifts.
- Why OTT Trailing Stop? The Optimized Trend Tracker (OTT) is a percentage-based trailing stop mechanism that only moves in the direction of the trend. When VAR-RSI crosses above OTT, a bullish trend is confirmed; when it crosses below, a bearish trend is confirmed. This provides clear, actionable signals rather than subjective interpretation.
- Price Scaling Innovation: By scaling RSI (0-100) to price using the formula (RSI * close / 50), the indicator overlays directly on the price chart. This allows traders to see how momentum relates to actual price levels, making trend analysis more intuitive than a separate oscillator pane.
- ATR Boundaries: Optional volatility-based boundaries show when price is extended relative to its normal range, helping identify potential reversal zones.
How the components work together:
- VAR smoothing removes RSI noise while preserving trend information
- OTT provides a dynamic trailing stop that generates clear crossover signals
- Price scaling allows direct overlay on the chart for intuitive analysis
- ATR boundaries add volatility context for profit target estimation
Core Components
1. VAR-RSI (Variable Index Dynamic Average RSI)
The foundation of this indicator is the VAR smoothing algorithm applied to RSI. VAR is an adaptive moving average that adjusts its smoothing factor based on the Chande Momentum Oscillator principle:
This creates an RSI that:
- Responds quickly during trending conditions
- Smooths out during choppy, sideways markets
- Reduces false signals compared to raw RSI
2. OTT (Optimized Trend Tracker)
The OTT acts as a dynamic trailing stop that follows the VAR-RSI:
- In uptrends, OTT trails below the VAR-RSI line
- In downtrends, OTT trails above the VAR-RSI line
- The OTT Percent parameter controls how closely it follows
When VAR-RSI crosses above OTT, a bullish trend is confirmed. When VAR-RSI crosses below OTT, a bearish trend is confirmed.
3. Price Scaling
The RSI (0-100 scale) is converted to price scale using:
This allows the indicator to overlay directly on price, showing how momentum relates to actual price levels.
Visual Components
VAR-RSI Line (Cyan/Magenta)
The main indicator line with gradient coloring:
- Cyan gradient when RSI is above 50 (bullish)
- Magenta gradient when RSI is below 50 (bearish)
- Line thickness of 3 for clear visibility
OTT Line (Yellow Circles)
The trailing stop line displayed as circles:
- Acts as dynamic support in uptrends
- Acts as dynamic resistance in downtrends
- Crossovers generate trading signals
Trend Fill
The area between VAR-RSI and OTT is filled:
- Cyan fill during bullish trends
- Magenta fill during bearish trends
- Fill transparency allows price visibility
Buy position and LONG on Dashboard with a Uptrend:
ATR Boundaries (Optional)
Dotted lines showing volatility-based price boundaries:
- Upper band: Close + (ATR x Multiplier)
- Lower band: Close - (ATR x Multiplier)
- Color matches current trend direction
Buy/Sell Signals
Clear labels appear at signal points:
- BUY label below bar when VAR-RSI crosses above OTT
- SELL label above bar when VAR-RSI crosses below OTT
- Additional glow circles highlight signal bars
Bar Coloring
Optional feature that colors price bars:
- Cyan bars during bullish trend
- Magenta bars during bearish trend
Dashboard Panel
The 8-row dashboard provides comprehensive status information:
- Signal: Current position - LONG or SHORT (large text)
- VAR-RSI: Current smoothed RSI value (large text)
- RSI State: OVERBOUGHT, OVERSOLD, BULLISH, or BEARISH
- OTT Trend: UPTREND or DOWNTREND based on OTT direction
- Bars Since: Number of bars since last signal
- Price: Current close price (large text)
- OTT Level: Current OTT trailing stop value
Input Parameters
RSI Settings:
- RSI Length: Period for RSI calculation (default: 100)
- Source: Price source (default: close)
VAR Settings:
- VAR Length: Adaptive smoothing period (default: 50)
OTT Settings:
- OTT Period: Trailing stop calculation period (default: 30)
- OTT Percent: Distance percentage for trailing stop (default: 0.2)
ATR Trend Boundaries:
- Show ATR Boundaries: Toggle visibility (default: enabled)
- ATR Length: Period for ATR calculation (default: 14)
- ATR Multiplier: Distance multiplier (default: 2.0)
Display Options:
- Show Buy/Sell Signals: Toggle signal labels (default: enabled)
- Show Status Table: Toggle dashboard (default: enabled)
- Table Position: Choose corner placement
- Color Bars by Trend: Toggle bar coloring (default: enabled)
Color Scheme:
- Bullish Color: Main bullish color (default: cyan)
- Bearish Color: Main bearish color (default: magenta)
- OTT Line: Trailing stop color (default: yellow)
- VAR-RSI Line: Main line color (default: teal)
- ATR colors for boundaries
How to Use RSI Trend Authority
Signal-Based Trading:
- Enter LONG when BUY signal appears (VAR-RSI crosses above OTT)
- Enter SHORT when SELL signal appears (VAR-RSI crosses below OTT)
- Use the OTT line as a trailing stop reference
Trend Confirmation:
- Cyan fill indicates bullish trend - favor long positions
- Magenta fill indicates bearish trend - favor short positions
- Check RSI State in dashboard for momentum context
Using the Dashboard:
- Monitor "Bars Since" to assess signal freshness
- Check RSI State for overbought/oversold warnings
- Use OTT Level as a reference for stop placement
ATR Boundaries:
- Price near upper ATR band in uptrend suggests extension
- Price near lower ATR band in downtrend suggests extension
- Boundaries help identify potential reversal zones
Parameter Optimization
For Faster Signals:
- Decrease RSI Length (try 50-80)
- Decrease VAR Length (try 30-40)
- Decrease OTT Period (try 15-25)
For Smoother Signals:
- Increase RSI Length (try 120-150)
- Increase VAR Length (try 60-80)
- Increase OTT Period (try 40-50)
For Tighter Stops:
- Decrease OTT Percent (try 0.1-0.15)
For Wider Stops:
- Increase OTT Percent (try 0.3-0.5)
Alert Conditions
Three alert conditions are available:
- Buy Signal: VAR-RSI crosses above OTT
- Sell Signal: VAR-RSI crosses below OTT
- Trend Change: OTT direction changes
Understanding the OTT Calculation
The OTT uses a percentage-based trailing mechanism:
This ensures the trailing stop only moves in the direction of the trend, never against it.
Best Practices
- Use on 1H timeframe or higher for more reliable signals
- Wait for signal confirmation before entering trades
- Consider RSI State when evaluating signal quality
- Use ATR boundaries for profit target estimation
- The longer RSI length (100) provides smoother trend detection
- Combine with support/resistance analysis for better entries
Limitations
- Signals may lag during rapid price movements due to smoothing
- Works best in trending markets; may whipsaw in ranges
- The overlay nature means RSI values are scaled, not absolute
- Default parameters are optimized for crypto and forex; adjust for other markets
Technical Notes
This indicator is written in Pine Script v6 and uses:
- VAR (Variable Index Dynamic Average) for adaptive smoothing
- OTT (Optimized Trend Tracker) for trailing stop calculation
- ATR for volatility-based boundaries
- Gradient coloring for intuitive trend visualization
The source code is open and available for review and modification.
Disclaimer
This indicator is provided for educational and informational purposes only. It is not financial advice. Trading involves substantial risk of loss. Past performance does not guarantee future results. Always conduct your own analysis and use proper risk management.
-Made with passion by officialjackofalltrades
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트레이딩뷰의 진정한 정신에 따라, 이 스크립트의 작성자는 이를 오픈소스로 공개하여 트레이더들이 기능을 검토하고 검증할 수 있도록 했습니다. 작성자에게 찬사를 보냅니다! 이 코드는 무료로 사용할 수 있지만, 코드를 재게시하는 경우 하우스 룰이 적용된다는 점을 기억하세요.
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해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.
오픈 소스 스크립트
트레이딩뷰의 진정한 정신에 따라, 이 스크립트의 작성자는 이를 오픈소스로 공개하여 트레이더들이 기능을 검토하고 검증할 수 있도록 했습니다. 작성자에게 찬사를 보냅니다! 이 코드는 무료로 사용할 수 있지만, 코드를 재게시하는 경우 하우스 룰이 적용된다는 점을 기억하세요.
The AI Trading Ecosystem, Built to win trades 📈
Get Full Access 👇
jackofalltrades.vip 🌐
t.me/jackofalltradesvip 🃏
Get Full Access 👇
jackofalltrades.vip 🌐
t.me/jackofalltradesvip 🃏
면책사항
해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.