Overview
Momentum indicators fluctuate between bounded values to identify overbought and oversold conditions. Oscillators help time entries and exits by measuring market momentum and potential reversal points.
| Type | Description |
|---|---|
| RSI (Relative Strength Index) | Measures momentum by comparing recent gains to losses. Values oscillate between 0 and 100. Overbought above 70, oversold below 30. |
| CCI (Commodity Channel Index) | Measures deviation from a statistical mean to identify cyclical trends and extremes. Overbought above +100, oversold below -100. |
| Stochastic Oscillator | Compares the closing price to its recent high/low range. Returns %K and %D values. Overbought above 80, oversold below 20. |
| Function | Description |
|---|---|
rsi | Relative Strength Index — momentum oscillator |
cci | Commodity Channel Index — deviation from statistical mean |
stochastic | Stochastic Oscillator — closing price vs recent range |
rsi - Relative Strength Index
rsi(source: TimeSeries, period?: number = 14, priceIndex?: number = 1): number — Relative Strength Index oscillator.
| Parameter | Type | Description |
|---|---|---|
source | TimeSeries | Source data for calculation |
period | number | Number of periods (default: 14) |
priceIndex | number | Index of price data (default: 1) |
Returns: number — RSI value from 0 to 100 for the current bar.
//@version=2
define(title="Multi-RSI Strategy", position="onchart", axis=false);
timeseries ohlcvData = ohlcv(symbol=currentSymbol, exchange=currentExchange);
// Calculate multiple RSIs
var rsi14 = rsi(source=ohlcvData.open, period=14);
var rsi50 = rsi(source=ohlcvData.open, period=50);
// Plot with different colors
plotLine(value=rsi14, width=2, colors=["purple"], fill=false, smooth=true, label=["RSI 14"], desc=["14-period RSI"]);
plotLine(value=rsi50, width=2, colors=["orange"], fill=false, smooth=true, label=["RSI 50"], desc=["50-period RSI"]);cci - Commodity Channel Index
cci(source: TimeSeries, period?: number = 20, constant?: number = 0.015): number — Commodity Channel Index.
| Parameter | Type | Description |
|---|---|---|
source | TimeSeries | Source data series |
period | number | Number of periods (default: 20) |
constant | number | Scaling constant (default: 0.015) |
Returns: number — CCI value, typically between -100 and +100.
//@version=2
define(title="CCI Strategy", position="offchart", axis=true);
timeseries trade = ohlcv(symbol=currentSymbol, exchange=currentExchange);
// Calculate CCI
var cciData = cci(source=trade, period=20, constant=0.015);
plotLine(value=cciData, width=2, colors=["blue"], fill=false, smooth=true, label=["CCI"], desc=["Commodity Channel Index"]);stochastic - Stochastic Oscillator
stochastic(source: TimeSeries, kPeriod?: number = 14, kSmoothing?: number = 3, dPeriod?: number = 3): [number, number] — Stochastic Oscillator.
| Parameter | Type | Description |
|---|---|---|
source | TimeSeries | Source data series |
kPeriod | number | %K periods (default: 14) |
kSmoothing | number | %K smoothing (default: 3) |
dPeriod | number | %D periods (default: 3) |
Returns: [number, number] — [%K, %D] values between 0 and 100.
//@version=2
define(title="Stochastic Strategy", position="offchart", axis=true);
timeseries ohlcvData = ohlcv(symbol=currentSymbol, exchange=currentExchange);
// Calculate Stochastic
var stochasticData = stochastic(source=ohlcvData, kPeriod=14, kSmoothing=3, dPeriod=3);
plotLine(value=stochasticData, width=2, colors=["green", "red"], label=["%K", "%D"], desc=["Stochastic %K", "Stochastic %D"]);Best Practices
Avoid False Signals
Oscillators can remain overbought or oversold for extended periods in strong trends. Always confirm with price action and trend direction.
Divergence Analysis
Look for divergences between price and oscillator. When price makes new highs or lows but the oscillator does not, a reversal may be coming.
Multiple Timeframes
Use oscillators on multiple timeframes. Higher-timeframe signals are generally more reliable than lower-timeframe signals.
Market Conditions
Oscillators work best in ranging markets. In strong trends, use them for timing entries rather than counter-trend trading.