Volume Factored Relative Strength Index (VFRSI)

RSI is an indicator that is dependent only on price. I modified RSI to factor in volume as well. On BTC chart presented above, VFRSI is more accurate than RSI in detecting extreme conditions (green line is VFRSI). In some instances, it seems to be better than RSI in detecting divergences as well (scroll to March 2018).

In smaller time frames, it reduces the bart effect present on RSI without compromising responsiveness (unlike moving averages).

Features:
- Parameterized variables
- Includes regular RSI
- Includes an adjustable weight factor to reduce the effect of volume. At 0, it is identical to RSI.

PS: If you have seen a similar indicator, please let me know. Otherwise, this indicator has the potential to replace regular RSI.

Your feedback is very welcome :)

c|:D

Versionshinweise:

- using built-in RSI function for more efficient calculation
- using exponentiation instead of multiplication to potentially increase volume weight

Note: when volume exponent is set to 0, this indicator is identical to RSI.

@Zamboniman pointed out that this indicator is similar to Money Flow Index (MFI). More detail here www.tradingview.com/...trength-Index-VFRSI/

Since MFI is a more established indicator and uses hlc3, you can try changing the input source to hlc3 in the input settings. If you do so, change the chart type to line style and change the source to hlc3 for correctly identifying divergences. I personally think hlc3 is the best option among different input sources for most indicators.

Versionshinweise:

Note on Volume Exponent:
- Above 1, effect of volume on RSI increases exponentially. Floating point can be used as an exponent
- From 1 to 0, effect of volume on RSI decreases. At 0, it is identical to regular RSI

Versionshinweise:

- Changed volume exponent to volume factor. This is a safer method of controlling volume factor because volume exponent have opposing effects above and below 1 unit.
- Added A/D weight to factor in only effective part of the volume. Please read the background section in my ADP indicator to understand how A/D ratio is calculated.
- Removed the extra bands

PS: I recommend using hybrid tickers e.g.(BITFINEX:BTCUSD+COINBASE:BTCUSD+BITSTAMP:BTCUSD)/3. Volume-based indicators are susceptible to wash trading/volume printing and hybrid tickers mitigate this issue.