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 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 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?

Is it for mean reversion or trend following?

How do I access the Adaptive Bounds RSI?