# Adaptive Bounds RSI Adaptive Bounds RSI replaces the fixed 70/30 lines with thresholds learned from the data: an online K-Means routine clusters recent RSI values into five regimes and moves the overbought and oversold bounds bar by bar. Markers fire only at statistically stretched readings, re-arm after a midline reset, and ship with regime and bound-cross alerts. - Indicator in the LuxAlgo Library, by LuxAlgo, published Feb 18, 2026. - Access: free. - Concepts: [Adaptive/dynamic RSI](https://www.luxalgo.com/library/concept/adaptive-dynamic-rsi/) (primary), [RSI](https://www.luxalgo.com/library/concept/rsi/), [Overbought/oversold](https://www.luxalgo.com/library/concept/overbought-oversold/) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=cmpwmzyem0001vhsgye71gmk2 - Page: https://www.luxalgo.com/library/indicator/adaptive-bounds-rsi/ **Adaptive Bounds RSI** lets the market decide where overbought and oversold begin. An online 1D K-Means algorithm clusters incoming RSI values around five centroids, and the outer centroids become live thresholds that stretch during persistent trends and tighten in quiet ranges: the [adaptive RSI](https://www.luxalgo.com/library/concept/adaptive-dynamic-rsi/) idea carried to its data-driven conclusion. Between the extremes, the centroids classify each bar into one of five regimes: Extreme Premium, bullish, neutral around the 50 midline, bearish, or Deep Discount. ## How to Trade the Adaptive Bounds RSI? - **Bullish marker**: RSI crosses below the adaptive lower bound into the Deep Discount zone, a statistically depressed reading rather than an arbitrary 30 tag. - **Bearish marker**: RSI crosses above the upper bound into Extreme Premium, flagging stretched momentum and potential exhaustion. - **Reset rule**: after a marker, no new signal arms until RSI crosses back through the 50 midline, a structural reset that keeps signals from clustering in strong trends. - **Regime read**: between markers, the zone RSI occupies frames the backdrop, so the question becomes which [overbought or oversold](https://www.luxalgo.com/library/concept/overbought-oversold/) regime price is in, not whether a fixed line was touched. Three alert conditions ship with it (Regime Flip, Lower Bound Cross, and Upper Bound Cross), covering the classification changes as well as the extreme events. ## Adaptive Bounds RSI Settings - **RSI Length**: lookback of the underlying oscillator; shorter lengths increase sensitivity, longer ones smooth the line. - **Learning Rate (K-Means)**: how fast the centroids chase new data. Higher values adapt quickly for short-term trading, lower values hold stabler bounds for swing horizons. ## Frequently Asked Questions ### How is this different from the standard RSI? The classic [Relative Strength Index](https://www.luxalgo.com/library/indicator/relative-strength-index/) judges every market against fixed 70/30 lines. This build derives its thresholds from the distribution of recent RSI values, so a reading only counts as extreme relative to how the oscillator has actually been behaving. ### Is it for mean reversion or trend following? Both, by design. The adaptive extremes and midline-reset markers serve disciplined mean-reversion entries, while the five-regime classification confirms trend direction between signals. ### How do I access the Adaptive Bounds RSI? The indicator is free on the LuxAlgo Library. This page can send it straight into Quant, our coding agent, to run or backtest the adaptive bounds on any market. You can also copy the source code from this page and run it anywhere Pine Script® runs. ## Related indicators - [Ultimate RSI](https://www.luxalgo.com/library/indicator/ultimate-rsi/) (Adaptive/dynamic RSI): markdown at https://www.luxalgo.com/library/indicator/ultimate-rsi.md - [Rainbow Adaptive RSI](https://www.luxalgo.com/library/indicator/rainbow-adaptive-rsi/) (Adaptive/dynamic RSI): markdown at https://www.luxalgo.com/library/indicator/rainbow-adaptive-rsi.md - [RSI Multi Length](https://www.luxalgo.com/library/indicator/rsi-multi-length/) (RSI): markdown at https://www.luxalgo.com/library/indicator/rsi-multi-length.md - [RSI Candlestick Oscillator](https://www.luxalgo.com/library/indicator/rsi-candlestick-oscillator/) (RSI): markdown at https://www.luxalgo.com/library/indicator/rsi-candlestick-oscillator.md - [Parabolic SAR Oscillator](https://www.luxalgo.com/library/indicator/parabolic-sar-oscillator/) (Overbought/oversold): markdown at https://www.luxalgo.com/library/indicator/parabolic-sar-oscillator.md - [RSI Divergence: Out-of-Sample Optimizer](https://www.luxalgo.com/library/indicator/rsi-divergence-out-of-sample-optimizer/) (RSI): markdown at https://www.luxalgo.com/library/indicator/rsi-divergence-out-of-sample-optimizer.md - [RSI Failure Swing](https://www.luxalgo.com/library/indicator/rsi-failure-swing/) (Momentum & Oscillators): markdown at https://www.luxalgo.com/library/indicator/rsi-failure-swing.md - [RSI-2](https://www.luxalgo.com/library/indicator/rsi-2/) (Momentum & Oscillators): markdown at https://www.luxalgo.com/library/indicator/rsi-2.md --- Source: https://www.luxalgo.com/library/indicator/adaptive-bounds-rsi/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/