Calc Trend

Calc Trend is a Forex trend indicator based on the familiar RSI, but there is one "but"!

We display RSI indicator signals on a price function chart using a mathematical approach. As you know, the overbought and oversold zones that the standard RSI fixes are often broken by the price and the price goes the other way. This makes the standard indicator inapplicable for real work in its pure form. Also, for sure, each user has noticed that at any part of the history, it is possible to change the RSI settings in this way that for a certain period of history all entries will be as accurate as possible. This is where there is work to be done.

The principle of operation is basic. When the price returns from the overbought / oversold zone and breaks through the level specified in the settings (Level_L, Level_H), a buy or sell signal is generated. Everything is at the open prices, so there is no redrawing, and the signal is generated at the open price of the current candle. Also, the algorithm is created in such a way that signals for buy and sell must alternate, thus skipping unnecessary signals.

The principle of operation is managerial. Let's imagine that the period of the RSI indicator is controlled by a "magic" function that changes its period so that on a sufficiently long history interval (for example, a year) the indicator displays acceptable entry points. How is this approach implemented ?! To control the period of the RSI indicator, we will use the derivative of the price function at a certain time interval (Length). Derivative of a function is a concept of differential calculus that characterizes the rate of change of a function at a given point. It is defined as the limit of the ratio of the increment of a function to the increment of its argument when the increment of the argument tends to zero, if such a limit exists. The price function has a finite derivative (at the point under study), which means it is differentiable at this point. And we can work with her. After the mathematical transformation is made, we transform the result using the coefficient (WindowDiv) to a value acceptable for the RSI indicator, and that's it! It remains only to configure the resulting Calc Trend indicator.

For clarity, in addition to the arrows, the function chart shows how many pips in plus can be squeezed out of the indicator. There is also a parameter (Spread), which subtracts part of the profit per spread for each signal. Also an important note, for clarity, arrows are drawn beyond the signal point, while the signal is counted only at the open price! The ranges for the selection of parameters are shown in the last screenshot.

For those who are interested in a bot created on the basis of this indicator and working according to the principle - there is a signal that closed an opposite deal and opened a new one in the specified direction, it can be downloaded and used for work. The bot is as simple as possible! The bot fully reflects the work of the indicator. Moreover, the bot can be optimized (by optimizing the parameters of the indicator itself) and thus automatically obtain the most optimal indicator indicators for the required period of history.

The main thing is to understand that the indicator parameters must be selected for each instrument and each timeframe.