Coloring Volume Bars with RSI Overbought and Oversold Signals

Summary

This indicator combines a price-based Relative Strength Index with volume bars. It calculates RSI from closing-price changes using Wilder smoothing, then colors volume orange when RSI is above the stated upper threshold and blue when it is below the lower threshold. In other conditions, bar color reflects whether the close is below or at or above the open. The document presents the indicator as an adaptation for a particular charting platform.

The display is a visual aid for spotting volume that coincides with RSI extremes; it does not change volume values or define trade entries, exits, or position sizing. The page provides an implementation description but no backtest, performance evidence, or rules for acting on the colors. RSI extremes can persist or reverse, so the colors alone do not establish a profitable signal, and the thresholds and lookback shown are simply the provided settings.

Key ideas

• The indicator uses a smoothed RSI calculated from closing-price changes.
• Volume bars are highlighted when RSI crosses the stated upper or lower threshold.
• Bars outside those RSI conditions are colored according to the candle direction.
• The visual indicator does not provide a complete trading strategy or evidence of performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.