Combining RSI Momentum with an ATR-Based Supertrend

Summary

This document describes an indicator that applies a Supertrend calculation to RSI values rather than directly to price. It calculates RSI, smooths it with a moving average, and uses an ATR-style range and configurable trend factor to form upper and lower bands. Trend state determines which band is displayed alongside the RSI and its overbought, oversold, and midpoint reference levels.

The proposed signals are crosses between RSI and the Supertrend, filtered by overbought or oversold thresholds. Parameters include the RSI and range lookbacks, smoothing method, trend factor, and threshold levels; example defaults are provided. The document explains the construction and shows an implementation, but supplies no backtest or performance evidence. It cautions that sideways markets can produce false signals and that settings may need adjustment across assets and conditions. The stated buy and sell rules are not fully consistent with the code’s plotted cross conditions, so users should verify signal direction before relying on them.

Key ideas

• The indicator calculates a Supertrend from RSI values to combine momentum and trend direction.
• An ATR-style range sets adaptive bands around the RSI series.
• The example uses a 14-period RSI and smoothing average, a 10-period range, and a trend factor of 0.8.
• Overbought and oversold thresholds are used to filter proposed cross signals.
• Sideways markets may cause false signals, and the document provides no performance testing.

Tags

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