Trading Signals

RSI measures the speed and change of price movements on a scale of 0–100. TradeClaw uses Wilder's original exponential smoothing formula.

// Wilder's smoothing RSI (from ta-engine.ts)
function calcRSI(closes: number[], period = 14): RSIResult {
  let avgGain = 0, avgLoss = 0;
  for (let i = 1; i <= period; i++) {
    const diff = closes[i] - closes[i - 1];
    if (diff > 0) avgGain += diff; else avgLoss -= diff;
  }
  avgGain /= period; avgLoss /= period;

  for (let i = period + 1; i < closes.length; i++) {
    const diff = closes[i] - closes[i - 1];
    avgGain = (avgGain * (period - 1) + Math.max(diff, 0)) / period;
    avgLoss = (avgLoss * (period - 1) + Math.max(-diff, 0)) / period;
  }

  const rs = avgLoss === 0 ? 100 : avgGain / avgLoss;
  return { value: 100 - 100 / (1 + rs) };
}

MACD measures the relationship between two EMAs. A positive histogram means short-term momentum is stronger than long-term — bullish. Negative — bearish.

Three EMAs establish the trend bias. Price above EMA20 > EMA50 > EMA200 is a strong uptrend. A golden cross (EMA50 crossing above EMA200) is particularly weighted in the confluence score.

Three bands (upper, middle SMA, lower) built from ±2 standard deviations. Price touching the lower band while other indicators are bullish = high-probability entry. Band squeeze (low bandwidth) often precedes a breakout.

Compares a closing price to its high-low range over 14 periods. Values below 20 (oversold) with %K crossing above %D is a buy signal. Values above 80 (overbought) with %K crossing below %D is a sell signal.