RSI and Bollinger Band Oversold and Overbought Signals

Summary

This indicator combines a 14-period RSI with 20-period Bollinger Bands using a standard deviation of 2. It marks a bullish condition when RSI falls below its oversold threshold of 32 while the bar’s low falls below the lower band. A bearish condition occurs when RSI exceeds 70 while the bar’s high rises above the upper band. The thresholds and indicator inputs can be changed.

The document describes plotted triangles and alert conditions for both signals, and includes a BTC/USDT futures backtest configuration covering February to May 2022. It provides no performance results or analysis of that test. The source code’s strategy orders appear to reverse the directional labels: it enters short on the bullish condition and long on the bearish condition. Signals based on simultaneous extremes may also occur during strong moves, so the document alone does not establish profitability or suitability.

Key ideas

• A bullish marker requires RSI below 32 and the bar low below the lower Bollinger Band.
• A bearish marker requires RSI above 70 and the bar high above the upper Bollinger Band.
• The described defaults are a 14-period RSI and 20-period Bollinger Bands with a standard deviation of 2.
• The indicator offers alerts and adjustable inputs, but the document reports no backtest performance.
• The included strategy code enters short on the bullish condition and long on the bearish condition.

Tags

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