RCI Strategy [PineIndicators]

RCI Strategy [PineIndicators]
This strategy leverages the Rank Correlation Index (RCI) — a statistical oscillator that measures the relationship between time and price rank — combined with a configurable moving average filter. It offers clean, rule-based entries and exits, and visually enhanced trade tracking via labeled markers and boxes on the chart.

The RCI Strategy is well-suited for momentum traders looking to capture directional shifts with confirmation through RCI smoothing.

Core Logic
1. Rank Correlation Index (RCI)

• Measures how closely price changes correlate with time rankings.
  
• Values range between -100 and +100.
  
• Thresholds at ±80 help identify potential reversals or extremes.
  

2. RCI Smoothing via Moving Average

• A moving average (MA) is applied to the RCI to smooth out fluctuations.
  
• Supported MA types:
  SMA
  EMA
  SMMA (RMA)
  WMA
  VWMA
  
• Users can disable the smoothing by selecting "None".
  

Trade Entry Logic

• Long Entry: RCI crosses above the selected moving average.
  
• Short Entry: RCI crosses below the moving average.
  
• Entries are restricted by trade direction settings:
  
  • Long Only
    
  • Short Only
    
  • Long & Short
    

Visual Features
RCI Panel Display

• Plots RCI line and its moving average in a separate pane.
  
• Horizontal guide lines at 0, +80, and -80 help visualize signal zones.
  

Trade Labels on Chart

• Buy Label: Plotted when a long entry is executed.
  
• Close Label: Plotted when any position is closed.
  
• Triangle markers for visual emphasis on direction change.
  

Trade Visualization Boxes

• A colored box is drawn between entry and exit prices.
  
• Green = profitable trade; Red = losing trade.
  
• Two horizontal lines connect entry and exit prices for reference.
  

Customization Parameters

• RCI Source: Select input price for the RCI (default: close).
  
• RCI Length: Set sensitivity of the oscillator.
  
• MA Type and Length: Choose and configure the smoothing filter.
  
• Trade Direction Mode: Define whether to allow Long, Short, or both.
  

Use Cases

• Swing traders who want to trade directional reversals with statistical backing.
  
• Traders seeking a clean and visual strategy based on rank momentum.
  
• Environments where both trend and range dynamics occur.
  

Conclusion
The RCI Strategy [PineIndicators] is a non-repainting, rule-based trading model that combines rank correlation momentum with smoothed trend logic. Its clean visual markers, labeled trades, and flexible MA filters make it a valuable tool for discretionary and systematic traders alike.