RSI Arrows on Price: Maximize Chart Space in ThinkOrSwim (Free Code)

Overview

In this tutorial I show you how to maximize chart space in ThinkOrSwim by taking the RSI indicator off the lower panel and plotting its signals on the price chart. You get back the chart real estate the RSI panel took up, and you see the RSI's up and down arrows right next to price action, without extra lines.

First I break down the built-in RSI code for anyone new to thinkScript: declare lower, inputs, def versus plot, and the signal plots. Then we write a short study that reads the RSI's arrows, change its settings with parameters, and size the arrows. It's for traders who want cleaner charts and a first look at how thinkScript references another study.

Key Takeaways

Why Plot RSI Signals on the Price Chart

Plotting the RSI's signals on the upper panel is a way to save the space a lower-panel RSI takes up and give that chart real estate back to price. It also lets you focus on the signals you care about and see them directly with price action. You don't have to worry about too many lines or too many indicators.

The RSI (Relative Strength Index) is a momentum oscillator from J. Welles Wilder. It compares the average gain with the average loss over a set number of bars, 14 by default, and plots the result from 0 to 100. Readings above 70 are usually called overbought and below 30 oversold.

The built-in RSI in ThinkOrSwim marks the bars where the RSI crosses back over those levels with arrows. Those arrows are the part this study keeps. If you want an RSI with more conditions behind its arrows, our free Dynamic RSI indicator has an upper study that puts its arrows on the price chart.

How the Built-In RSI Code Is Organized

The built-in RSI is a short thinkScript study you can read line by line. Load the RSI on your chart from the studies list, then click the scroll icon with the lock next to it to bring up its code. The table maps the parts I walk through in the video.

declare lower vs declare upper

Line 5 is the first line of code: declare lower;. It tells ThinkOrSwim this indicator should always plot on the lower panel. If it said declare upper instead, the indicator would always plot on the price panel.

Inputs Are the Study Settings

Lines 7 to 12 are the input variables. Inputs are the values a user can change from the study settings menu without opening the code. Double-click the RSI on your chart and you'll see all of them. In the video I changed the length from 14 to 20, clicked OK, and the RSI in the lower panel adjusted on its own.

def vs plot

Lines 14 to 16 are the calculations for the RSI, and the last one, the change ratio, funnels into the RSI variable on line 18. Those 3 calculations are def variables, and the RSI is a plot variable. That's the difference between the 2 kinds:

The Level Lines and the Signal Plots

Next come 2 static plots, OverSold and OverBought. Both are tied to the inputs, overbought equals 70 and oversold equals 30, and they draw the 2 horizontal lines on the RSI panel. The last 2 plots, UpSignal and DownSignal, are the arrows. In the built-in code they look like this:

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When the RSI crosses above the oversold level, UpSignal plots a green arrow at the oversold mark. DownSignal is the opposite: the RSI crossing below the overbought level, with a down arrow in the downtick color. The formatting lines below them show the arrows only if the user selected show breakout signals, the last input, and set each arrow's color and direction.

How to Build the Upper-Panel RSI Arrows

The upper-panel RSI study is 8 lines of thinkScript plus an optional declare upper, and every line is written out in the video. Open the study settings menu, click Create to start a new study, and delete the code that's already in the editor. Then build it in the steps below. The full study is in the Code tab.

Step 1: Reference the RSI's Signal Plots

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Type the study name, RSI, with parentheses, because it's a built-in indicator. The period after it means you're calling one specific variable from inside the RSI. UpSignal compiles because it's the exact name the RSI code gives that plot: plot UpSignal.

Only plot variables can be called with this period approach. If you put one of the RSI's def variables after the period, it won't work. Our increasing volume scan uses the same syntax to read VolumeAvg().Vol, and our AddLabel tutorial uses it to print another study's value in a label.

Step 2: Turn the Signal Into a Plot

With only the 2 def lines, the study shows up red when you click OK, and when you click Apply nothing appears on the chart. Open the code and you'll see the error message: At least one plot should be defined. A def never draws anything, so the study needs a plot.

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I gave the plot a slightly different name from the def, upPlot, and fed in the up value. Click Apply and you'll still see nothing on the chart. The plot needs formatting before it shows up.

Step 3: Draw the Arrows

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SetPaintingStrategy tells ThinkOrSwim how to draw the plot, and BOOLEAN_ARROW_UP draws an up arrow on each bar where the value is true. Click Apply and the arrows appear on the price chart the way you'd expect. Repeat it for the down side:

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Click Apply and the down arrows appear too. They line up exactly with the arrows on the lower panel RSI.

Step 4: Make the Arrows Bigger

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SetLineWeight sets the size of the arrows. I tried a weight of 5 first, which is the largest weight you can choose, and the arrows got much bigger, maybe obnoxiously large. Bringing it down to 3 keeps the arrows manageable while they're still easy to see.

Step 5: Add declare upper (Optional)

ThinkOrSwim plots a new study like this on the upper panel by default. If you want to go out of your way to specify it, add declare upper; as the first line. That tells ThinkOrSwim to always plot the study on the upper panel charts.

How to Change the RSI Settings in Your Study

The custom study reads the RSI at its default settings unless you pass parameters. You could copy the RSI's input variables into your study, but then you'd need to bring in all of its calculations too. The smarter way is to pass the values you want as parameters inside the parentheses after RSI.

The RSI has 6 parameters, and they go in a specific order. You can't type 80 as the first value and expect the RSI to know you mean the overbought level. The first value is always the length.

Specify only the parameters you want to be different from the defaults. To change one after the first, list every parameter before it in order, from left to right, and leave off the ones after it. The same goes for the moving averages. These are the calls I used in the video:

Match the Lower RSI When You Compare

The parameters in your code don't follow the settings of the RSI on your lower panel. In the video I set my code to RSI(20, 80, 20), then changed the lower RSI's levels back to 70 and 30 with a length of 20. The lower RSI showed arrows, which meant I had to come back and change the code's parameters as well.

Changing the code to RSI(20, 70, 30) lined the arrows up: the same pairs of arrows on the price chart as on the RSI panel, with one hiding behind a chart bubble. Since 70 and 30 are the RSI's defaults, RSI(20) gives the same arrows with less typing.

How I Read the Arrows on Price

An up arrow on the price chart is the bar where the RSI crossed back above the oversold level at your settings, and a down arrow is the bar where it crossed back below overbought. With the arrows on the candles, you see each one next to the price action around it, without looking down at a second panel.

Treat an arrow as a read on momentum and check it against price before you act on it. Decide where your stop goes first, and size the trade so a stop-out costs a small, fixed share of your account.

Common Problems and Fixes

Most problems with this study come from one of the steps above. Our guide on how to fix bugs in thinkScript code covers errors more generally.

Customizing the Study

The upper-panel RSI study is a starting point you can change through trial and error, which is how you get a better feel for thinkScript. The 3 changes from the video are the parameters inside RSI(), the line weight, and the optional declare upper.

One more change that isn't in the video: the built-in RSI colors its arrows with the uptick and downtick colors. To do the same on the price chart, add these 2 lines to the study:

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For more lessons like this one, see our thinkScript tutorials.

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