James (Jim) M. Hurst bands form % of bands around the median calculated using the Hurst equation. External bands (called ExtremeBands) mean extreme overbought/oversold conditions. Internal bands mean potential price return points. They also act as dynamic support/resistance levels.
The indicator has seven adjustable parameters:
- Period - calculation period
- Inner value - internal bands deviation value
- Outer value - external bands deviation value
- Extreme value - extreme bands deviation value
- Show extreme lines - display the lines of extreme values
- Show outer lines - display the lines of external values
- Show inner lines - display the lines of internal values
Calculation:
Center = MA[Period/2-1] HExtreme = Center * (1+Extreme value/100) LExtreme = Center * (1-Extreme value/100) HOuter = Center * (1+Outer value/100) LOuter = Center * (1-Outer value/100) HInner = Center * (1+Inner value/100) LInner = Center * (1-Inner value/100)
where:
MA = SMA(PRICE_MEDIAN, Period)
Hurst bands are often used together with Hurst oscillator, in particular, to search for divergences between bands and oscillator lines.
Fig. 1. Hurst bands
Fig. 2. Hurst bands and Hurst oscillator
