We highly recommend combining the Bollinger Bands with this indicator – it’s the perfect match. Starfield Trading created the cTrader Dynamic RSI indicator, a perfect match between Bollinger Bands and a Moving Average and this provides a solution to the problem by creating a buy and a sell limit that change depending on the standard deviation (volatility) of the relative strength index, RSI, indicator.
The Dynamic RSI indicator is designed to profit from existing trends and predict future trends based on current and past trends. It is a revolutionary indicator primarily based on the well-known RSI indicator. However, the RSI indicator is restricted by the static oversold and overbought levels set by the user, which in essence makes it inefficient in this role when applied to a dynamic market such as Forex. Depending on the existing trend, whether it's an up, down or sideways trend, we should be using different levels that adapt to the current trend of the market.
This is an indicator that can adapt and set dynamic oversold and overbought levels in order to maximize profitability for the user and by recognizing past trends and evaluating them, the indicator is able to predict approaching trends with great accuracy and set the levels accordingly.
How The Dynamic RSI Works
The indicator is simple to use because it has an interface similar to the RSI indicator. However, while RSI indicator levels are static the Dynamic RSI ones are dynamic. The signal line is created by a moving average and the price line is created by multiplying the standard deviation of the RSI over a certain period.
These dynamic lines form boundaries and are used to trigger buy and sell signals. So, instead of buying a stock if its RSI value is lower than 30, the Dynamic RSI indicator will tell us to buy that stock if RSI is greater than the signal line and the signal line is greater than the price line or when RSI is greater than the price line. On the opposite, you have a sell signal when RSI is lower than the signal line and the signal line is lower than the price line or when RSI is lower than the price line. The Buy stop signal comes when RSI is lower than the signal line and the sell-stop signal comes when RSI is greater than the signal line.
One of the advantages of the Dynamic RSI indicator is that you do not need to remember all the rules because this is coded in the indicator and you can see all signals on the right side of the indicator.
Much more, the Dynamic RSI indicator offers also a visual signal for trend changes. To do this and to eliminate the false signals, these signals are based on time series moving averages, Hull moving averages and Bollinger Bands volatility.
Why Is the Dynamic Zone RSI a Winner?
The movement of the RSI is derived from price and tries to eliminate some of the “noise” of the market and it succeeds to do so. If you pay attention to other stuff (like the angle of the channel created by the bands or support and resistance levels), you can incorporate this indicator into a successful strategy.
To eliminate the most false signals, we recommend using this indicator together with BBands, MACD, CCI and Stochastic indicators. (Note: We will provide a system trading with these indicators, or you can buy every from these indicators separately.)
Telegram & Email Signal Alerts
You can receive either an email or an instant Telegram message direct to your PC or mobile phone the moment this indicator shows a signal to enter a trade.
Conditions for the Alert Signals
The following conditions must be true to send a buy signal alert, the reverse applies to sell signals:
- Main Trend: Bullish
- HMA: Buy.
- RSI: Bullish.
How To Install & Remove
First, make sure you have the cTrader trading platform installed and then simply unzip the file and double-click on it to automatically install it onto the platform.
If you have any questions, please first search our product help forum for the answer, if you cannot find it, post a new question.
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