This code snippet demonstrates how to implement an on-chart Relative Strength Index (RSI) with dynamic overbought and oversold levels using the ProBuilder language. The RSI is a popular momentum oscillator used in technical analysis that measures the speed and change of price movements.

//PRC_OnChart RSI | indicator
//25.10.2019
//Nicolas @ www.prorealcode.com
//Sharing ProRealTime knowledge
// --- settings
rsiperiod=14
ATRperiod = 20
maPeriod = 20
maMethod = 0
overBought = 70
overSold = 30
// --- end of settings
maPrice = customclose
dTR = 0
for i = 0 to ATRperiod-1
    dTR=dTR+max(abs(Dhigh(i)-Dlow(i)),max(abs(Dhigh(i)-Dclose(i+1)),abs(Dlow(i)-Dclose(i+1))))
next
avgRange = dTR/ATRperiod
maValue = average[maPeriod,maMethod](maPrice)
rsivalue = rsi[rsiperiod](maPrice)
//---- Buffer1=maValue
Buffer2=maValue+(avgRange*(overBought-50)/100)
Buffer3=maValue-(avgRange*(50- overSold)/100)
Buffer4=maValue+(rsivalue -50)/100*avgRange
return Buffer1 style(dottedline,1) as "mid level",
       Buffer2 style(dottedline,1) as "overbought level",
       Buffer3 style(dottedline,1) as "oversold level",
       Buffer4 coloured(0,255,0) style(line,2) as "OnChart RSI"

Explanation of the Code:

• Settings: The initial part of the code defines various parameters such as the RSI period, ATR period, moving average period and method, and thresholds for overbought and oversold conditions.
• Calculating the Average True Range (ATR): The code calculates the ATR, which is used to adjust the overbought and oversold levels dynamically based on market volatility. This is done using a loop that sums the greatest of the following for each period: the absolute difference between the high and low, the high and the previous close, and the low and the previous close.
• Moving Average and RSI Calculation: The moving average of the closing prices is calculated, followed by the RSI of the closing prices.
• Buffers for Plotting: Four buffers are defined to store the values for plotting:
  • Buffer1 stores the moving average value (mid level).
  • Buffer2 and Buffer3 calculate the dynamically adjusted overbought and oversold levels based on the ATR.
  • Buffer4 adjusts the RSI value to be plotted on the chart, scaled by the average range.
• Return Statement: The return statement plots these values on the chart with specific styles and colors, making it visually intuitive.

This code is a practical example of how to enhance traditional RSI indicators by incorporating market volatility into the overbought and oversold levels, providing a more adaptive tool for technical analysis in trading systems.