Stock and NQ Futures Convergence Strategy

// This Pine Script™ code is subject to the terms of the Mozilla Public License 2.0 at https://mozilla.org/MPL/2.0/
// © jawauntb

//@version=5
strategy("Stock and NQ Futures Convergence Strategy", overlay=true)

// Inputs
rsiSource = input(close, title="RSI Source")
rsiLength = input(14, title="RSI Length")
rsiUpperThreshold = input(50, title="RSI Upper Threshold")
rsiLowerThreshold = input(25, title="RSI Lower Threshold")

// Calculate the composite RSI for the stock
stockRSI = ta.rsi(rsiSource, rsiLength)

// Calculate the composite RSI for the NQ futures
nqRSI = request.security("NQ1!", timeframe.period, ta.rsi(close, rsiLength))

// Short entry condition
shortCondition = nqRSI < rsiLowerThreshold and stockRSI > rsiUpperThreshold

// Long entry condition
longCondition = nqRSI > rsiUpperThreshold and stockRSI < rsiLowerThreshold

// Entry and exit signals
shortEntry = shortCondition and strategy.position_size == 0
shortExit = nqRSI > rsiUpperThreshold and strategy.position_size < 0
longEntry = longCondition and strategy.position_size == 0
longExit = nqRSI < rsiLowerThreshold and strategy.position_size > 0

// Execute trades
if shortEntry
    strategy.entry("Short", strategy.short)
else if shortExit
    strategy.close("Short")
else if longEntry
    strategy.entry("Long", strategy.long)
else if longExit
    strategy.close("Long")

// Plot signals
plotshape(shortEntry, title="Short Entry", location=location.belowbar, style=shape.triangledown, size=size.small, color=color.red)
plotshape(shortExit, title="Short Exit", location=location.abovebar, style=shape.triangleup, size=size.small, color=color.red)
plotshape(longEntry, title="Long Entry", location=location.belowbar, style=shape.triangleup, size=size.small, color=color.green)
plotshape(longExit, title="Long Exit", location=location.abovebar, style=shape.triangledown, size=size.small, color=color.green)