ELFIEDT RSI + Reversion

📘 Script Title:
ELFIEDT RSI + Reversion

📄 Description:
This script identifies potential mean reversion opportunities by combining price volatility, momentum, and volume confirmation. It is designed to help traders detect moments where price may be temporarily overextended, increasing the likelihood of a short-term reversal or pullback.

The approach integrates three core components:

🔹 1. Volatility Envelope
The strategy uses a dynamic banding system based on a statistical measure of price deviation from its recent average. When price closes significantly outside this envelope, it signals a potential extreme movement, suggesting conditions are ripe for a reversion to the mean.

🔹 2. Momentum Confirmation via RSI
To enhance reliability, momentum is evaluated using the Relative Strength Index (RSI). Only when RSI confirms that price action is either overbought or oversold does the script consider a reversal more probable.

🔹 3. Volume Spike Filter
The script incorporates a volume confirmation layer to avoid false signals. A signal only triggers if there is an unusually high level of trading activity, helping to identify areas of market interest and possible exhaustion.

🔔 Signal Triggers & Alerts:
Upside Reversion Zone:
When price moves significantly below the volatility band, RSI shows oversold conditions, and volume confirms abnormal activity. The chart highlights this with a green label and a green-colored bar.

Downside Reversion Zone:
When price moves significantly above the volatility band, RSI shows overbought conditions, and volume confirms a spike. This is marked by a red label and a red-colored bar.

Built-in Alerts:
The script includes alert conditions that notify you when either scenario occurs. These can be used for real-time monitoring or automation.

📊 Visual Features:
Colored bars and labels show potential reversion areas.

The chart plots a trend-following baseline with dynamic upper and lower bands to visualize volatility extremes.

Up and Down zones are clearly marked for easier decision-making.

⚠️ Disclaimer:
This script is intended for educational and informational purposes only. It does not constitute financial advice, trading signals, or guarantees of future results. Users should perform their own due diligence before making trading decisions.