Trading signals based upon a linear regression channel applied to a classic RSI indicator.

If the RSI exceeds the upper band, the price should reverse to its mean and therefore a sell signals is announced.

If the RSI breaks the lower band, the price should reverse to its mean and a buy signals is plotted on the indicator.

You can adjust the RSI period of calculation (with variable ‘len’) and the linear regression channel period with “period”. The upper and lower band spread can be adjusted with the “deviations” setting (default is a 2 times multiplier from the mean).

//PRC_RSILinearRegressionSignals| indicator
//25.09.2020
//Nicolas @ www.prorealcode.com
//Sharing ProRealTime knowledge
//converted from tradingview
//https://www.prorealcode.com/topic/rsi-linear-regresion/

// --- settings 
len = 21 //RSI Length
period     = 200 //Period
deviations = 2.0 //Deviation(s)
// --- end of settings 

irsi = rsi[len](close)
periodMinusOne = period-1

Ex = 0.0
Ey = 0.0
Ex2 = 0.0
Exy = 0.0
for i=0 to periodMinusOne
closeI = (irsi[i])
Ex = Ex + i
Ey = Ey + closeI
Ex2 = Ex2 + (i * i)
Exy = Exy + (closeI * i)
ExEx = Ex * Ex
next
//slope
if Ex2=ExEx  then 
slope = 0.0 
else
slope= (period * Exy - Ex * Ey) / (period * Ex2 - ExEx)
endif
ilinearRegression = (Ey - slope * Ex) / period
intercept = ilinearRegression + barindex * slope
deviation = 0.0
for i=0 to periodMinusOne
deviation = deviation + square((irsi[i]) - (intercept - slope * (barindex[i])))
next
deviation = deviations * sqrt(deviation / periodMinusOne)
startingPointY = ilinearRegression + slope / periodMinusOne
//lineColor 
if startingPointY > startingPointY[1] then 
//color.blue 
r=0
b=255
else
//color.red
r=255
b=0
endif 
a = startingPointY-deviation
c1 = startingPointY
b = startingPointY+deviation

up=irsi crosses over a
down=irsi crosses under b
if up then 
drawtext("↑ up",barindex,irsi-5,dialog,standard,20) coloured(0,255,0)
endif 
if down then 
drawtext("↓ down",barindex,irsi+5,dialog,standard,20) coloured(255,0,0)
endif
 
return irsi, a coloured(r,0,b) style(line,3)  as "curve low",c1 coloured(r,0,b) style(line,3) as "curve", b coloured(r,0,b) style(line,3)  as "curve high"