When prices move outside the bands, it can imply trend continuation. A move that originates on one side of band will generally move to the other side band. Generally, when upward prices touch the upper Bollinger Band, and RSI is below 70, the trend will continue. However if upward prices touch the upper Bollinger Band and RSI is above 70, the trend may reverse. Variable moving averages are exponential moving averages that automatically adjusts the smoothing constant based on the volatility of the data series.
High volatility gets a larger smoothing constant so that more weight is given to current data.
Low volatility gets a smaller smoothing constant so that less weight is given to current data. Terms and Conditions of use. Site developed by Immelo Software Corporation.