Similar to in concept, but with a few enhancements!Improvements over the standard indicator? Adaptive Decision Boundaries:Who says 70-30 are the best decision boundaries to use for trading off of the indicator? Why not 80-20, or another combination? Is 70-30 still the best when you shorten or lengthen the indicator's look-back window? What about when you change the time frame? I wondered this for a while too, and thats what inspired me to create this indicator! Instead of using fixed lines for the boundaries, the boundaries are calculated based off of a user specified percentile.
What this means is that the reference lines are calculated by looking at the values the indicator took over some look back window, and calculating an upper and lower bound where the actually stayed n% of the time over that look-back window. The default parameter given for this argument is 90. What that means is over the last n days, the indicator spent 90% of it's time between the upper and lower bound. Smoothing The Indicator:The indicator on smaller time windows tends to be very noisy.
The RSI Paint Indicator is an indicator that takes a primary RSI indicator just like the one used on any charting bundle and “paints” all divergences and reversals on the RSI chart in 4 completely different and distinct colors.
However a simple over a short time period on the indicator helps to cancel out this noise without losing too much information. This makes cross-overs more meaningful as they are less likely to happen due to small deviations. In addition, it also paints a smoothed picture of the price momentum that is easy and pleasant to read. The reference lines are also smoothed. Color Coding Crosses When They Happen!Wouldn't it be great if your software highlights cross overs when they happen for you so you would not have to go back over your chart and identify it for yourself?
Well this software does! It paints red behind the indicator when the indicator goes above the upper reference line, and paints blue when the goes below the lower reference line.The default parameters were selected based on what I feel is useful for daily candles on. However you are free to change the parameters as you see fit for different securities and time frames.