Reverse Engineering Price Bands from Resampled Oscillators

Summary

This indicator converts selected oscillator thresholds into corresponding price levels. Instead of calculating oscillator values from observed prices, it algebraically rearranges the oscillator formulas to estimate which prices would produce chosen upper, lower, and center readings. It offers reverse calculations for RSI, Stochastic, and CCI, presenting the resulting levels as chart bands that can frame potential overbought and oversold conditions.

The calculations can use samples selected by bar count, elapsed time, or price movement, with the price-action method supporting several ways to size a move. The indicator also exposes trend and outside-band signals for current and resampled prices, and uses colors to show price relative to its calculated center and bands. The document explains the construction and intended interpretation, but provides no performance evidence or validation that threshold crossings predict reversals. The bands are derived from oscillator assumptions, so they describe prices associated with chosen readings rather than guaranteed support, resistance, or trading signals.

Key ideas

• Oscillator formulas can be rearranged to estimate prices associated with chosen oscillator thresholds.
• The indicator supports reverse RSI, Stochastic, and CCI calculations.
• Sampling can be based on bars, time intervals, or price changes.
• Trend and outside-band outputs are available for both current and resampled prices.
• The bands are analytical reference levels, not evidence of predictive performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.