Delta RSI. Practice of RSI interaction with each other
Classic technical analysis tools such as RSI, Stochastic or Bollinger Bands are described in great detail in many books and websites; moreover, the authors of these tools themselves gave clear and direct instructions for their use.
However, traders, in search of effective signals, began to create their own methods for using standard forex indicators, as well as signals, the use of which was not provided even by the developers themselves.
Some of these strategies are absolutely beyond logic, but despite this, many of these applications become classics and give rise to the emergence of other custom indicators.
One such approach is the interaction of two lines of RSI indicators with different periods, and in this article you will get acquainted with the Delta RSI indicator, which implements this type of signal as a separate and independent tool.
The Delta RSI indicator is a custom technical analysis tool that implements the principle of analysis and interaction of two RSIs with different calculation periods among themselves in the form of a histogram.
Since Delta RSI is primarily an oscillator, it can be safely applied to absolutely any trading assets, from currency pairs to CFDs on stocks, indices, and even cryptocurrencies.
It's also worth noting that Delta RSI, like the RSI itself, can be applied to all time frames, making it an excellent tool for both scalpers and long-term traders.
Installing the Delta RSI indicator
The idea of using signals from two RSI indicators with different periods that interact with each other is far from new. However, its implementation as a separate, independent indicator only occurred in late 2016. Because the tool was published in the official MT4 developer library, it was distributed completely free of charge from day one.
Since Delta RSI is included in the library, you can download it in two ways, namely through the built-in library or through the data directory.
To install an indicator through the library, launch your trading terminal and go to the "Terminal" panel, where your balance information is located. Next, go to the "Library" tab and perform a simple sorting process to display only indicators.
Find Delta RSI in the resulting list and, as shown in the image below, use the additional menu to download it.
If installing the indicator through the library is not possible, follow the standard installation procedure.
To do this, scroll to the end of the article and download the indicator, then place this file in the appropriate folder in the terminal data directory, namely, in the "Indicators" folder. Then install according to the general instructions - http://time-forex.com/praktika/ustanovka-indikatora-ili-sovetnika
Using the script. Settings:
The Delta RSI indicator can be used as a trend filter. A histogram position above level 0 can be considered an uptrend, and below level 0, a downtrend.
Therefore, level 0 can be considered a signal level: if the histogram crosses the center line 0 from bottom to top, open a buy position, and if from top to bottom, open a sell position.
It is also worth paying attention to the color of the histogram, as red indicates that the market is overbought, and green indicates that the market is oversold.
Therefore, if you receive a buy signal at a time when Delta RSI shows that the market is overbought, you should avoid such a trade and vice versa.
The indicator's settings allow you to customize it to suit your trading style and the specific tasks you're setting it for. For example, the Fast RSI Period and Slow RSI Period variables allow you to change the calculation periods for the fast and slow relative strength index.
The Signal Level variable allows you to change the signal level: if the slow RSI is above it, the histogram turns red, and if it's below it, the histogram turns green.
The Type graph variable allows you to switch the chart display type from a histogram to bars.
In conclusion, it's worth noting that the Delta RSI indicator is a more convenient implementation of a signal based on the intersection and interaction of the fast and slow RSI, which simplifies market analysis.
Download the Delta RSI indicator
