1. Introduction
The technical indicator “Stochastic RSI + Heikin Ashi”, created by user CoffeeshopCrypto, is a hybrid tool that merges two complementary analytical approaches: the Stochastic RSI oscillator and Heikin Ashi candles. Its aim is to provide a clearer and smoother reading of market momentum, helping traders filter price noise and more accurately identify potential turning points.
2. Indicator Concept
This indicator is based on two core elements:
- Stochastic RSI (StochRSI): a second-derivative oscillator that applies the stochastic calculation to the RSI, making it highly sensitive to overbought and oversold levels and useful for detecting early trend reversals.
- Heikin Ashi Candles: a price smoothing technique that highlights market trends. In this case, the candles are built not from price, but from the smoothed StochRSI, making the indicator entirely momentum-based.
Combining both provides a clearer picture of market momentum while reducing the impact of false signals common with traditional oscillators.
3. How It Works
The indicator performs the following operations:
- RSI calculation using a customizable period (
lengthRSI). - Stochastic RSI computation:
- Calculates the current RSI value.
- Identifies the highest and lowest RSI values over a defined window (
lengthStoch). - Normalizes the RSI within that range to derive the stochastic oscillator.
- Smoothing:
- Applies moving averages to get smoothed %K (
smoothK) and %D (smoothD) lines. - Subtracts 50 to center the oscillation around zero.
- Applies moving averages to get smoothed %K (
- Heikin Ashi candle creation:
- Builds synthetic candles using smoothed %K and %D values.
- Colors candles green if close ≥ open, red otherwise.
- Visual zones:
- Adds shaded areas between +50/+40 and -40/-50 to highlight overbought and oversold zones.
4. Settings and Customizable Parameters
Key inputs include:
lengthRSI: RSI length (default: 14)lengthStoch: stochastic length applied to RSI (default: 14)smoothK: smoothing period for %K (default: 8)smoothD: smoothing period for %D (default: 3)
Reference levels:
- Overbought: +40 to +50
- Oversold: -40 to -50
These can be adjusted to suit your preferred signal sensitivity.
5. Practical Applications
This indicator is particularly useful for:
- Trend confirmation: Heikin Ashi candles help confirm ongoing momentum.
- Reversal signals: divergence and zero-crosses between %K and %D can indicate turning points.
- Noise reduction: visual representation makes it easier to ignore minor, non-actionable swings.
It serves as both a trend-following filter and a momentum reversal signal generator.
6. Source Code (ProRealTime – ProBuilder)
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//------------------------------------------------// //PRC_Stochastic RSI + Heikin Ashi //version = 0 //02.05.25 //Iván González @ www.prorealcode.com //Sharing ProRealTime knowledge //------------------------------------------------// //-----Inputs //------------------------------------------------// src=close //---Stochastic RSI inputs lengthRSI=14 //RSI length lengthStoch=14 //Stochastic Length smoothK=8 //K smoothD=3 //D //------------------------------------------------// //-----Stochastic RSI Calculation //------------------------------------------------// rsi1=rsi[lengthRSI](src) maxrsi=highest[lengthStoch](rsi1) minrsi=lowest[lengthStoch](rsi1) osc=(rsi1-minrsi)/(maxrsi-minrsi)*100 k=average[smoothK](osc)-50 d=average[smoothD](k) //------------------------------------------------// //-----Stochastic Heikin-ashi //------------------------------------------------// haopen=(k[1]+d[1])/2 haclose=(k+d+d+k)/4 hahigh=max(k,max(haopen,haclose)) halow=min(k,min(haopen,haclose)) //------------------------------------------------// //-----Candles and Colors //------------------------------------------------// if haclose>=haopen then r=0 g=255 b=0 else r=255 g=0 b=0 endif drawcandle(haopen,hahigh,halow,haclose)coloured(r,g,b) ob1=50 ob2=40 os1=-50 os2=-40 colorbetween(ob1,ob2,255,82,82,50) colorbetween(os1,os2,122,255,82,50) //------------------------------------------------// return 0 as "zero" style(dottedline) |
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Filename : download the ITF files
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