Cardwell RSI Range Rules for Trend Regime Signals
Summary
The indicator applies Cardwell’s RSI range concept to classify market regimes. It combines price relative to a 50-period simple moving average with RSI(14) membership in a bull band of 40–80 or a bear band of 20–60; otherwise the state is neutral. The premise is that RSI behavior shifts with trend, so fixed overbought and oversold thresholds may miss how momentum holds within a healthy trend.
A raw regime must persist for consecutive bars before confirmation, which reduces brief flips but delays signals. Buy and sell markers appear when the confirmed state changes, rather than whenever RSI crosses a level. An optional ADX filter can screen weaker trends. A second indicator variant draws ATR-based stop and target levels, but the document gives no backtest evidence or rule for managing later signals. The described thresholds and settings are implementation choices, and the lag introduced by confirmation may affect entries.
Key ideas
- Bull and bear regimes require agreement between price trend and RSI range membership.
- The bull RSI band is 40–80, while the bear band is 20–60.
- Consecutive-bar confirmation reduces brief regime flips at the cost of delayed signals.
- Signals mark changes into a confirmed regime rather than RSI level crossings.
- An optional ADX filter and ATR-based trade levels are included, without performance evidence.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.