SMI_PRO

Simple Math Indicator + RSI & MACD Combo Pack

This RSI and MACD Combo Indicator is the all-in-one toolkit you need to upgrade your trend analysis and stop cluttering your charts. It’s designed to streamline your trading by combining a unique momentum/volatility gauge with the two most trusted oscillators in technical analysis.

Get clearer signals, higher-confidence entries, and a cleaner workspace with this integrated powerhouse.

1. The Simple Math Indicator (The “Momentum Engine”)

Displayed in its own separate panel, this indicator measures the squared deviation of the price from its short-term moving average. Think of it as a “momentum accelerator” or a “volatility visualizer.”

• What it does: It provides a clear, visual representation of how aggressively the price is moving away from its recent average (mean).
• How to Read It:
  • Sharp Rises: Indicate a powerful surge in momentum and a rapid expansion in volatility. This is the “expansion” or “impulse” phase of a move. This is when trends are born or accelerate.
  • Low/Flat Plot: Represents consolidation, low volatility, or “market chop.” When the plot is low, it means the price is hovering tightly around its average, indicating indecision or a resting phase.

This indicator is your first clue that a significant move is either just beginning or already underway.

2. The RSI & MACD Combo (The “Confirmation Panel”)

This single, optimized panel is the core of our RSI and MACD Combo Indicator. It integrates two legendary indicators to save chart space and provide clear, confluent signals. It acts as your primary confirmation tool.

• RSI (Relative Strength Index – 14):
  • Your Overbought/Oversold Meter: Moves between 0 and 100 to identify extreme price levels. Traditionally, levels above 70 are considered Overbought, and levels below 30 are Oversold.
  • Key Signal: The most powerful signal is often not entering the zone, but exiting it. An exit from oversold (crossing up through 30) signals that bearish exhaustion may be over and bulls are stepping in. An exit from overbought (crossing down through 70) signals the opposite.
• MACD (Moving Average Convergence Divergence – 12, 26, 9):
  • Your Trend & Momentum Confirmer: This indicator provides a deeper look into the trend’s health, direction, and strength.
  • Histogram: The bars represent the distance between the main MACD line and its Signal line. An expanding histogram signals strengthening momentum. A shrinking (or waning) histogram signals fading momentum.
  • Crossovers: A MACD line crossing above its signal line is a classic bullish “buy” signal. A cross below is a bearish “sell” signal.

How to Use Them Together: The “Trifecta” Strategy

The real power of this toolkit comes from combining all three signals. Instead of relying on one indicator, you wait for a “trifecta” of events to align, giving you a much higher-probability trade entry.

Example 1: The Bullish Reversal (High-Confidence Long Entry)

1. Look for Exhaustion (RSI): Price has been in a downtrend, and the RSI drops into the oversold zone (below 30). Wait for it to cross back up above the 30 line.
   • Signal: Potential bottom is in; selling pressure is exhausted.
2. Look for Acceleration (Simple Math Indicator): As the RSI exits, look for the Simple Math Indicator to start rising sharply.
   • Signal: New bullish momentum is accelerating aggressively; price is “snapping back” from its average.
3. Look for Confirmation (MACD): Confirm this new momentum with the MACD. Look for the histogram to expand to the upside, or for the MACD line to cross above its signal line.
   • Signal: The new short-term trend is confirming bullish.

Result: All three indicators align, signaling a strong, early entry into a new potential bullish move.

Example 2: The Bearish Reversal (High-Confidence Short Entry)

1. Look for Exhaustion (RSI): Price is in an uptrend and becomes overbought (above 70). Wait for the RSI to cross back down below the 70 line.
   • Signal: Potential top is in; buying pressure is exhausted.
2. Look for Acceleration (Simple Math Indicator): Look for the plot to rise sharply as the price falls aggressively away from its average. (Remember, the indicator measures deviation, whether up or down).
   • Signal: New bearish momentum is accelerating.
3. Look for Confirmation (MACD): Confirm with a histogram expanding to the downside (turning red and growing) or a MACD line crossing below its signal line.
   • Signal: The new short-term trend is confirming bearish.