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Reference8 min read
Momentum indicators that fluctuate between bounded values to identify overbought and oversold conditions. Oscillators help time entries and exits by measuring market momentum.

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Overview

FunctionRangeOverboughtOversold
rsi()0-100> 70< 30
cci()Unbounded> +100< -100
stochastic()0-100> 80< 20

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rsi()

Relative Strength Index - measures momentum by comparing recent gains to losses.

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Signature

rsi(source: TimeSeries, period?: number = 14, priceIndex?: number = 1): number

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Parameters

ParameterTypeDescription
sourceTimeSeriesSource data for calculation
periodnumberNumber of periods (default: 14)
priceIndexnumberIndex of price data (default: 1)

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Returns

number - RSI value between 0-100

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Example

//@version=2

define(title="Multi-RSI Strategy", position="offchart", axis=true);

timeseries ohlcvData = ohlcv(symbol=currentSymbol, exchange=currentExchange);

// Calculate multiple RSIs
var rsi14 = rsi(source=ohlcvData.close, period=14);
var rsi50 = rsi(source=ohlcvData.close, period=50);

// Plot with different colors
plotLine(value=rsi14, width=2, colors=["purple"], label=["RSI 14"], desc=["14-period RSI"]);
plotLine(value=rsi50, width=2, colors=["orange"], label=["RSI 50"], desc=["50-period RSI"]);

// Reference lines
hline(value=70, color="red", width=1, style="dashed", label="Overbought");
hline(value=30, color="green", width=1, style="dashed", label="Oversold");

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cci()

Commodity Channel Index - measures deviation from statistical mean to identify cyclical trends.

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Signature

cci(source: TimeSeries, period?: number = 20, constant?: number = 0.015): number

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Parameters

ParameterTypeDescription
sourceTimeSeriesSource data series
periodnumberNumber of periods (default: 20)
constantnumberScaling constant (default: 0.015)

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Returns

number - CCI value, typically between -100 and +100

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Example

//@version=2

define(title="CCI Strategy", position="offchart", axis=true);

timeseries trade = ohlcv(symbol=currentSymbol, exchange=currentExchange);

// Calculate CCI
var cciData = cci(source=trade, period=20, constant=0.015);

plotLine(value=cciData, width=2, colors=["blue"], label=["CCI"], desc=["Commodity Channel Index"]);

// Reference lines
hline(value=100, color="red", width=1, style="dashed", label="+100");
hline(value=-100, color="green", width=1, style="dashed", label="-100");
hline(value=0, color="gray", width=1, style="solid", label="Zero");

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stochastic()

Stochastic Oscillator - compares closing price to price range over time.

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Signature

stochastic(source: TimeSeries, kPeriod?: number = 14, kSmoothing?: number = 3, dPeriod?: number = 3): [number, number]

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Parameters

ParameterTypeDescription
sourceTimeSeriesSource data series
kPeriodnumber%K periods (default: 14)
kSmoothingnumber%K smoothing (default: 3)
dPeriodnumber%D periods (default: 3)

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Returns

[number, number] - [%K, %D] values between 0-100

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Example

//@version=2

define(title="Stochastic Strategy", position="offchart", axis=true);

timeseries ohlcvData = ohlcv(symbol=currentSymbol, exchange=currentExchange);

// Calculate Stochastic
var stochData = stochastic(source=ohlcvData, kPeriod=14, kSmoothing=3, dPeriod=3);

plotLine(value=stochData, width=2, colors=["green", "red"], label=["%K", "%D"], desc=["Stochastic %K", "Stochastic %D"]);

// Reference lines
hline(value=80, color="red", width=1, style="dashed", label="Overbought");
hline(value=20, color="green", width=1, style="dashed", label="Oversold");

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Tips

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Avoid False Signals

Oscillators can remain overbought/oversold for extended periods in strong trends. Always confirm with price action and trend direction.

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Divergence Analysis

Look for divergences between price and oscillator. When price makes new highs/lows but oscillator doesn’t, reversal may be coming.

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Multiple Timeframes

Use oscillators on multiple timeframes. Higher timeframe signals are generally more reliable than lower timeframe signals.

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Market Conditions

Oscillators work best in ranging markets. In strong trends, use them for timing entries rather than counter-trend trading.