Volatitity Bands (STARC) on RSI for reversal warning [beta]

26 Feb 2020

Origin: The Indicator uses STARC volatilty bands created by Manning Stoller, based on ATR.
He perfered them to Bollinger because extreme price action never exceeds them.
Her former scholar and now TA Superstar Constance Brown applied them on RSI for getting
very relavant trend reversals. (She only used them in times when "overbought or not" becomes a severe question.
What it does: It delivers a reversal signal after rsi exceeded the bands and - as the bands resume the trend - the rsi fails to test the band once more. This is the moment of a reversal warning.
How to work with:
- Take the index of your interest and choose a time horizon one or two scales higher than your usual working horizon .(i.e if you work on Daily choose weekly).
-Scale the upper and the lower band via settings, so that the rsi only in rare cases exceeds or touches the bands. This is to tweak the reversal threshold. (For weekly SPX i am fine with 2.2 and 2.1)
- Find the arrows that mark possible reversals.
- Ready

Note: I called this a beta because i publish it with nearly no practical experience with it , just checked the formal correctness of the code. (Published so fast because it was written during the coronavirus days, for which to handle it might be helpful. )So feedback very welcome.
I took the formula in slight modification from the book "Technical Analysis for the Trading Professional", 2nd edition, by Constance Brown.

"Fun" Note: As you see the script would have warned before the corona selling - if you had used it.
I didn't because bull flags and all predicted nice weather...

Greets and again feedback welcome
yoxxx

26 Feb 2020

Catatan Rilis

Update with removed drawings.

30 Jul 2023

Catatan Rilis

Pointed to a misspelling in the title of my script, i took this as an opportunity
to upgrade to pine 5 and add an optional wma (asked so by a follower.)

It is certainly no beta anymore, since it works well now for nearly 3 yrs. In most cases, an adjusting of the parameters
as in the original description, is not necessary.
Apparently you can't change the old title when publishing as update, so the typo and "[beta] must stay.
(For the sake of a continuous like-counter. "Volatility", without typo, is part of "Category".)

Have fun,
yoxxx