RSI Filter Indicator for MT4

The Relative Strength Index (RSI) is one of the most popular oscillator indicators. This is because it is a very versatile oscillator that is also very responsive to price action.

The RSI filter indicator is designed to enhance the standard RSI as it provides an objective indication of the direction of the trend by adding signal lines.

What is the RSI filter indicator?

The RSI filter is a momentum indicator based on the Relative Strength Index (RSI) with a slight modification that adds a signal line to the RSI.

This indicator plots the direction of the trend as an oscillator plotting two lines. The first line to be drawn is the main RSI line. It is a blue line with jagged oscillations. This line oscillates in the range from zero to 100. The second line, the fine red line, is the signal line coming from the RSI line.

 

The direction of the trend can be observed based on where the RSI line is generally in relation to the signal line. The RSI line is generally above the signal line when it is trending up and below the signal line when it is trending down.

How does the RSI filter indicator work?

The RSI filter indicator uses the same calculations as the RSI oscillator with an additional signal line.

This indicator uses the formula shown below.

RSI level 1 = 100 – [100 / (1 + (Average Gain / Average Loss))]

 

RSI level 2 = 100 – [100 / (1 + ((Previous Average Gain x 13) + Current Gain) / – ((Previous Average Loss x 13) + Current Loss))]

The resulting values ​​are then plotted as points on the RSI line oscillations.

The signal line is calculated as a moving average derived from the RSI line.

How to use the RSI filter indicator for MT4

The RSI filter indicator has several modifiable options in its indicator settings.