What it does
- Measures trend strength by modelling where price sits inside a smoothed price-action channel, then applying RSI to that “channel position”
- It doesn’t predict, but shows what price is doing right now.
This indicator uses the same calculations as my old “Price Action Trend Overlay” script, which I’d published Protected for some forgotten reason. Some users have asked for the source code, so I’m republishing it as open source. I’ve also tidied up the code a bit, added some visualisations of elements that were present but never drawn, such as the PA channels themselves, drawn the trend metric in a separate pane, added alerts, and made some more configuration options available.
Why it’s great
It’s great because:
- A dynamic range of candle colours shows the trend strength at a glance.
- The trend line drawn in its own pane is an optional way to measure trend strength in detail.
- Markers on the main chart show overbought and oversold, derived from the same PA calculations.
- Optional “Price Average” line and channel colouring add an extra configurable element.
How to get it
Click the Use on chart button from the script page on TradingView:
Limitations
This works on any market, any timeframe. Lower timeframes will be choppier.
How to trade with it
Treat the line in the separate pane as a measure of *trend strength*, not a prediction.
Neutral zone = trend is not convincingly bullish or bearish.
Strong moves away from neutral = “trend has conviction”.
Overbought/oversold doesn’t mean “reversal right now”. It means the *rate of directional change* is unsustainably strong.
Overbought in an uptrend: trend is overheating. Tighten long stops; expect rest/retrace/reversal once overheating ends.
Oversold in an uptrend: the countertrend down is likely exhausting. Potential “buy the dip” context, especially with some confluence.
Reverse the above for downtrends.
Don’t trade these signals blindly; use market structure, S/R, and your other tools.
Support and questions
For any questions about using this indicator, or to report a bug, please leave a comment on the script page on TradingView rather than sending a message.
Credits
The idea for using smoothed highs/lows to create a price-action channel came from my humble trading mentor. All the code is my own.