Published in Stocks & V. 24:2 (February, 2006): The Self-Adjusting
David Sepiashvili's article, "The Self-Adjusting ," presents a technique to adjust the traditional overbought and oversold thresholds so as to ensure that 70-80% of values lie between the two thresholds. Sepiashvili presents two algorithms for adjusting the thresholds. One is based on standard deviation, the other on a of the .
This script allows you to choose between plotting the Self-Adjusting bands or the traditional bands. You can also plot a smoothed ( or ) and change the theme color for dark or light charts.
If you find this code useful, please pass it forward by sharing open source!
Thank you to all of the open source heroes out there!
"If I have seen a little further it is by standing on the shoulders of Giants."