Help me understand something. Let's say I am looking at 1 hour charts. I have RSI (14) indicator on the bottom. How can the indicator be a line chart? I mean for a particular hourly timeperiod, as the price varies, RSI also fluctuates in some range right? So doesn't it make more sense to have a candlestick for indicator too?
I believe generally indicators are being charted using the closing price or average price, whatever. Is there a way to get a candlestick for them too?
RSI also fluctuates in some range right? So doesn't it make more sense to have a candlestick for indicator too?
Actually, it doesn't make as much sense to have a candlestick.
A candlestick shows the OHLC for that particular bar of that particular timeframe, eg the OHLC for that particular 1 hour.
RSI shows a single computed number which is the average for the last 14 bars (or whatever period was used).
If RSI is a single computed number calculated from the last specified number of periods, why does RSI value on 1 hour charts (or whatever period you use) keeps varying throughout the current hour?
Because it also includes the latest (current) bar which is still changing with each tick, except when you use PRICE_OPEN.
Because it also includes the latest (current) bar which is still changing with each tick, except when you use PRICE_OPE
Thanks for the reply. So if you agree RSI changes throughout the current period, why not capture it? why not a candlestick? I don't think it is useless. Lets say I want to buy when RSI was at 40 on 4 hour charts. So EA executes the order when the condition is met. Later, if I want to see why my EA opened a new order in that particular period, there is no way of knowing because the history may show RSI as 53 or whatever for that period.
You are like saying price moves throughout a time period. But is is useless to capture it. All we need is a line chart connecting open prices, or close prices or average prices.
Anyways, lets not argue if it is useful or not. If anyone knows someway of capturing the value change, please let me know. Thanks in advance.
So if you agree RSI changes throughout the current period, why not capture it? why not a candlestick?
The point about the RSI, or any other indicator which uses an average/aggregation of the last X number of bars is you end up with a single value that tells you something about the trend and pattern based on the last X number of bars. You are far less concerned about the effects of the last bar as while it may vary, its effect is far less significant on an average/aggregate value, as simple arithmetic would tell you.
A candlestick to represent the RSI has never occurred to me. Neither does it appear to have occurred to anyone else, including the makers of the MT4 software. So you have to write something yourself. You can use 3 indicator buffers to capture the HLC values as well as one for the PRICE_OPEN. There is no option to draw this as a candle on an indicator, so you have to use the other existing options, line, histogram etc.