Indicators
RSI Exponential Smoothing

RSI Exponential Smoothing Indicator

By
Zeiierman
on
April 27, 2024

Share this article

The Relative Strength Index (RSI) and the Exponential Moving Average (EMA) are two popular indicators. Traders use these indicators to understand market trends and predict future price changes. However, traders often wonder which indicator is better: RSI or EMA. 

What if these indicators give similar results? To find out, we wanted to study the relationship between RSI and EMA. We focused on a hypothesis: when the RSI goes above 50, it might be similar to the price crossing above a certain length of EMA. Similarly, when the RSI goes below 50, it might be similar to the price crossing below a certain length of EMA.

Our goal was simple: to figure out if there is any connection between RSI and EMA. 

Conclusion: Yes, it seems that there is a correlation between RSI and EMA, and this indicator clearly displays that relationship. Read more about the study here!

Overview of the indicator

The RSI Exponential Smoothing indicator displays RSI levels with clear overbought and oversold zones, shown as easy-to-understand moving averages, and the RSI 50 line as an EMA. Another excellent feature is the added FIB levels. To activate, open the settings and click on "FIB Bands." These levels act as short-term support and resistance levels which can be used for scalping.

Benefits of using this indicator instead of regular RSI

The findings about the Relative Strength Index (RSI) and the Exponential Moving Average (EMA) highlight that both indicators are equally accurate (when it comes to crossings), meaning traders can choose either one without compromising accuracy. This empowers traders to pick the indicator that suits their personal preferences and trading style.

How it works

Crossings over/under the value of 50

The EMA line in the indicator acts as the corresponding 50 line in the RSI. When the RSI crosses, the value 50 equals when Close crosses the EMA line.

RSI crosses 50
RSI crosses 50

Bouncess from the value 50

In this example, we can see that the EMA line on the chart acts as support/resistance equals when RSI rejects the 50 level.

RSI bouncing off the 50 line
RSI bouncing off the 50 line

Overbougt and Oversold 

The indicator comes with overbought and oversold bands equal when RSI becomes overbought or oversold.

RSI Overbought and Oversold
RSI Overbought and Oversold

How to use

This visual representation helps traders to apply RSI strategies directly on the price chart, potentially making RSI trading easier for Traders. 

Subscribe to our membership

TRY IT YOURSELF!

Access the Free RSI Exponential Smoothing Indicator on TradingView

ACCESS THE INDICATOR ON TRADINGVIEW!

Heading 1

Heading 2

Heading 3

Heading 4

Heading 5
Heading 6

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur.

Block quote

Ordered list

  1. Item 1
  2. Item 2
  3. Item 3

Unordered list

  • Item A
  • Item B
  • Item C

Text link

Bold text

Emphasis

Superscript

Subscript

Subscribe to our membership