REDK BSI Trading Guide

The RedK BSI (Bull/Bear Sentiment Index) is an advanced momentum and market sentiment oscillator. It processes various price components (Close, High, Low, Volume, and spreads) through multiple weighted models to measure the underlying balance of power between buyers and sellers, helping traders spot impending market shifts and hidden divergences.

What does the indicator show?

• BSI Line: The primary oscillator line that fluctuates around the zero level, indicating whether bulls or bears are currently in control.
• Sentiment Area: A background filled region representing the longer-term market sentiment bias (green for bullish bias, red for bearish bias).
• Signal Line: A smoothed moving average of the BSI line used to identify momentum crossovers.
• Divergence Markers: Automated text labels (Bull/Bear) identifying discrepancies between price action and the oscillator momentum.

Key Settings

• Lookback & Lengths: Several parameters (Lookback, Main Length, Sentiment Length) control the responsiveness of the internal models to recent price movements.
• Weight Toggles: 8 individual toggles allowing you to include or exclude specific metrics (like Volume, BoP, Spread) from the final calculation score.
• Show Divergences: Enables the automatic mathematical detection and drawing of bullish and bearish divergences.

How to use Strategy Parameters (Condition Source)

Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.

1. Trend & Momentum Signals

Core crossover and threshold signals to detect trend direction.

• BSI crosses Signal — A classic momentum trigger firing when the fast BSI crosses the slower Signal line.
• BSI vs Zero — Identifies when the primary momentum shifts from bearish to bullish (or vice versa) through the zero axis.
• Sentiment vs Zero — Determines the broader baseline market state.

Strategy Example: For a confirmation entry into a Long position, you could use: BSI crosses Signal (crosses above) while ensuring Sentiment vs Zero > 0.

2. Divergences

Powerful reversal indications automatically plotted by the algorithm.

• Bullish Divergence — True when price makes a lower low but the BSI makes a higher low.
• Bearish Divergence — True when price makes a higher high but the BSI makes a lower high.

Strategy Example: If you are looking to enter a counter-trend reversal trade, setting Bullish Divergence is True serves as a high-probability trigger for a Long entry.