Volume-Weighted RSI Using Lower-Timeframe Candle Volume Estimates

Summary

This indicator adapts RSI by weighting changes in the selected price source according to estimated up-volume and down-volume. It estimates those volumes on a configurable lower timeframe, assigning volume by candle direction or, optionally, distributing it across candle bodies and wicks. The resulting volume-weighted price changes are smoothed and used to calculate an RSI-style reading, intended to show whether volume associated with rising or falling prices is stronger.

The display marks configurable overbought and oversold levels and colors the indicator by a trend state that changes around a narrow band centered on 50. This is an estimate based on candle structure and timeframe data, not a direct measure of buyer-initiated and seller-initiated trades. The document explains the construction and later fixes for missing values, but gives no predictive or backtest evidence; interpretation depends on the selected source, lower timeframe, and wick-weighting setting.

Key ideas

• The indicator weights price changes in its RSI calculation using estimated up-volume and down-volume.
• Volume estimates come from a configurable lower timeframe and can optionally account for candle wicks.
• Its RSI-style output is colored according to a trend state around a threshold band centered on 50.
• The volume allocation is inferred from candle data rather than directly identifying buyer- or seller-initiated trades.
• The document describes the calculation and display but presents no performance evidence.

Tags

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