Why the Standard RSI is Not Enough (And How the QQE Algorithm Fixes It)
Analytics & Forecasts

Why the Standard RSI is Not Enough (And How the QQE Algorithm Fixes It)

24 February 2026, 16:49
Daniel Ortega Clemente
Daniel Ortega Clemente
0
28

The Problem with the Traditional RSI

The Relative Strength Index (RSI) is one of the most popular momentum oscillators in trading. However, it has a massive flaw: it often gives false "overbought" or "oversold" signals during strong trends. How many times have you sold because the RSI was above 70, only to watch the price continue to rally for days?

The standard RSI lacks one crucial element: Volatility awareness.

The Solution: The QQE Algorithm 

To fix this, professional quantitative traders use the QQE (Qualitative Quantitative Estimation).

The QQE algorithm takes the smoothed RSI values and combines them with the Average True Range (ATR). By adding dynamic volatility bands to the RSI momentum, the QQE creates a much more robust directional filter. It only signals a trend change when the momentum is strong enough to break through the current market volatility.

Reading the QQE Mod Professional Signals

I have developed an optimized version of this algorithm for MetaTrader 5, turning the complex math into a simple, color-coded visual histogram.


Instead of guessing if a line is crossing a level, you simply read the colors:

  • Blue Histogram: The price has broken above the upper volatility band. The Bulls are in absolute control.

  • Red Histogram: The price has broken below the lower volatility band. The Bears are in control.

  • Gray Histogram: The momentum is trapped inside the volatility bands. This is the neutral zone (consolidation). Stay out.


You have full control over the inputs. You can adjust the RSI Length, the Smoothing factor, and the QQE Factor (which multiplies the width of the ATR bands) to fit your specific asset and timeframe.

Test it on your charts I am currently releasing this professional analysis tool completely for free to the MQL5 community.

You can download the QQE Mod Professional directly from my profile here: https://www.mql5.com/en/market/product/163621

If you test it and find it useful for filtering out false RSI signals, I would highly appreciate an honest review on the product page!

Disclaimer: This post and the provided tool are for educational and information purposes only. It does not constitute financial advice. Always test any indicator or strategy on a Demo account first.


#rsi, QQE, volatility, atr, CUSTOM INDICATOR, Professional Tools