The observation that RSI tends to oscillate between 40 and 80 in uptrends and between 20 and 60 in downtrends, rather than around 50.
In a sustained uptrend, rsi pullbacks repeatedly stop near 40 and rallies push past 70, so the whole range shifts upward. In downtrends the mirror happens. Andrew Cardwell popularised using these shifted ranges instead of fixed 30 and 70 thresholds.
This reframing fixes the worst problem with fixed thresholds: it stops treating overbought in an uptrend as a sell signal and instead treats a failure to reach the usual upper band as the meaningful event.
It is still a description of what has happened, and the boundaries are fitted by eye to recent data. Used as a way to identify regime, it is sensible; used to draw precise levels on the oscillator, it becomes another form of curve fitting.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Divergence between price and RSI. RSI measures how one-sided recent price moves have been on a 0–100 scale. Here price sets a higher peak while RSI sets a lower one, so the second push carried less momentum than the first.Range versus trend. On the left price keeps bouncing between the same floor and ceiling, which is a range. On the right each high and each low is higher than the last, inside a pair of sloping lines called a channel.
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