RSI with Volatility Bands formula by Manning Stoller
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Note that one have to adjust the indicator for each market, since each market has a different momentum "mean". The indicator in the picture is adjusted for the CL where it has a pretty good fit. Only on very high momentum should the RSI have a clean breakout of the volatility bands. Otherwise it should as best as possible be fitted so that RSI is accurately "kissing" the bands on high momentum.
Since markets have a tendency to fall quicker than rising, the factor for the lower volatility band should be greater than the upper.
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MultiCharts
Category The Elite Circle
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