Indicators: RSI divergence candles

[Automated-Trading]

RSI divergence candles:

RSI divergence candles

Author: Mladen Rakic 

[hhr_rahimi]

Hi, I found this indicator very useful in technical analysis (direction changes of candle's shadow is the signal)

but i have to work with mql4 platform, Could you convert to mq4?

thanks,

[Lucas Tavares]

Could someone explain a bit more about this Indicator? Thanks!!

[hhr_rahimi]

it shows a dynamic behavior of people in the market, 

when it goes DOWN too much, it means that people are SELLING less than real price, you should buy

when it goes UP too much ,  it means that people are BUYING higher than real price, you should sell

[Lucas Tavares]

That's a common explanation for RSI and oscillators in general , which is totally relative to your SETUP.
What I want to know is how this Indicator works.

[lippmaje]

It combines a fast and a slow RSI. Both values are smoothed by an SMA. The smoothed slow RSI value forms the opening of each candle, the smoothed fast one the closing. The candle wicks are max resp. min of both values (here not smoothed). Color is green when fast RSI is above slow RSI, red when below, gray if equal.

[Lucas Tavares]

lippmaje:
It combines a fast and a slow RSI. Both value are smoothed by an SMA. The smoothed slow RSI value forms the opening of each candle, the fast the closing. The candle wicks are max resp. min of both values. Color is green when fast RSI is above slow RSI, else red.

Thanks!!! I'll save it within the code!

[lippmaje]

Lucas Tavares:
Thanks!!! I'll save it within the code!

Ok. Divergence here means difference between the two RSIs.

[Victor]

What do the candle shadows mean in this case and how could they turn into buy or sell signals?