Custom Buy and Sell Signal with Body Ratio and RSI

Indicator Overview:
Name: Custom Buy and Sell Signal with Body Ratio and RSI

Description: This indicator is designed to detect buy and sell opportunities by analyzing the body size and wicks of candles in combination with the RSI indicator and volume. It helps identify trend reversals under high-volume market conditions, which enhances the reliability of the signals.

Indicator Features:

RSI (Relative Strength Index): The RSI indicator is used to assess oversold (RSI < 40) or overbought (RSI > 60) conditions. These zones signal potential reversals when combined with other technical signals.

Candle Body Analysis:

The indicator compares the size of the current and previous candles to validate signals.
For a buy signal, the current candle must be bullish and have a body size proportional to that of the previous bearish candle.
Similarly, for a sell signal, the current candle must be bearish with a body size comparable to the previous bullish candle.

Wick Validation:

The indicator analyzes the wick length to reinforce or exclude signals.
For a buy signal, the lower wick of the bullish candle must be shorter than that of the previous bearish candle.
For a sell signal, the upper wick of the bearish candle must be shorter than that of the previous bullish candle and smaller than 30% of the candle's body.
High Volume:

Signals are only generated when the volume exceeds a certain threshold, ensuring that signals are issued in active market conditions.
The minimum volume should be adjusted based on the asset. For example, for gold, a minimum volume of 9000 is recommended.

Trading Strategy:

Buy Signals:

A bearish (red) candle is followed by a bullish (green) candle with a body size that is comparable to the previous candle (0.9 to 3 times the body size).
The lower wick of the bullish candle is shorter than that of the previous bearish candle, confirming the validity of the signal.
The RSI must be below 40, indicating an oversold condition.
The volume must exceed the defined threshold (e.g., > 9000 for gold) to confirm an active market.

Sell Signals:

A bullish (green) candle is followed by a bearish (red) candle with a comparable body size.
The upper wick of the bearish candle must be shorter than that of the previous bullish candle and must not exceed 30% of the body size.
The RSI must be above 60, indicating an overbought condition.
The volume must also exceed the minimum threshold for a valid signal.
Usage Guidelines:
Volume Adjustment: It is crucial to adjust the volume threshold depending on the asset you're trading. For example, for assets like gold, a minimum volume of 9000 is recommended to filter out weak signals. Each asset has a different volume dynamic, so test different thresholds on historical data to find the optimal setting.

Time Frame:
It is recommended to use this indicator on a 1-hour (1H) chart for the best signal relevance. This time frame provides a good balance between reactivity and filtering false signals.

Confluence:
Combine the signals from this indicator with other tools like support and resistance levels, moving averages, or chart patterns to increase your chances of success. Confluence of indicators improves the reliability of signals.

Risk Management:
Implement strict risk management. Use stop-losses based on volatility, such as ATR (Average True Range), or the wick size to determine exit points.

Backtesting:
Before using it live, conduct backtesting on various assets to fine-tune the parameters, especially the volume threshold, and to verify performance across different market conditions.

This indicator is an excellent tool for traders looking to identify trend reversals based on solid technical criteria such as RSI, candle structure, and volume. It is particularly effective on volatile assets with precise volume adjustment.