# RSI-2 RSI-2 is an indicator on [Vela](https://vela.luxalgo.com/chart), our next-generation charting platform, written in Pine Script®. RSI-2 runs Wilder's RSI with a 2-bar lookback and frames the classic mean-reversion playbook around it: 90/10 bands mark stretched two-bar moves, a 200-bar trend filter decides which side is tradable, and a 5-bar exit average tracks the resolving close. Setup triangles print on the price chart, and six alerts cover setups, exits and raw band stretches in both directions. - Indicator in the LuxAlgo Library, by LuxAlgo, published Jun 17, 2026. - Access: free. - Concepts: [RSI-2](https://www.luxalgo.com/library/concept/rsi-2/) (primary) - Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=w3dh2gg4lqm9lo6tdkpw3dk0 - Page: https://www.luxalgo.com/library/indicator/rsi-2/ **RSI-2** runs Wilder's RSI at a two-bar lookback, turning the oscillator into a fast gauge of short-term stretch, and builds the published mean-reversion workflow around it. The definitive clean build of [RSI-2](https://www.luxalgo.com/library/concept/rsi-2/) adds the two price-chart averages the rules call for: a 200-bar trend filter deciding tradable direction, and a 5-bar exit average tracking the resolving close. Setups print as triangles on the price chart; the pane carries 90/10 bands and a gradient fill around the 50 midline. ## How to Trade the RSI-2? - **Long setup**: RSI-2 stretched below the oversold band with price above the trend filter, buying a routine pullback inside an uptrend. - **Short setup**: the mirror image, a stretch above the overbought band with price below the filter. - **Exit**: a long resolves on the first close back above the exit average, a short on the first close back below it. - **Raw stretches**: the band-crossing alerts fire regardless of regime, usable for scaling out into a spike rather than initiating. A new setup is only marked once the previous one has resolved through the exit average. ## RSI-2 Settings - **RSI Length** (default 2) and **Source** (default close): the oscillator itself. - **Overbought Level** (default 90) and **Oversold Level** (default 10): at a two-bar length the classic 70/30 bands trigger constantly, so the meaningful levels sit further out. - **Consecutive Readings** (default 1): closes beyond a band required to qualify a setup; 2 reproduces the stricter two-reading variant. - **Trend Filter Length** (default 200): the regime moving average drawn on the price chart. - **Exit Average Length** (default 5): the short average the resolution is read against. - Style toggles draw the trend filter, exit average and setup markers (default enabled) plus exit markers (default disabled), with the **Gradient Fill** (default enabled). ## Frequently Asked Questions ### How does RSI-2 compare with Connors RSI? They come from the same short-term mean-reversion school. [Connors RSI](https://www.luxalgo.com/library/indicator/connors-rsi/) is a composite blending a short RSI with a streak component and a rank component, while RSI-2 is the raw two-bar oscillator plus the trading rules around it. The composite smooths the read; the two-bar line keeps the arithmetic transparent. ### Why does a setup need the trend filter? Because some pullbacks keep going. Buying weakness is only defensible in a regime that keeps producing recoveries. The filter blocks longs in downtrends and shorts in uptrends. ### Can I use divergence on RSI-2? Rarely usefully. A two-bar RSI saturates routinely, so divergence geometry carries little meaning. The line is built for threshold stretches; slower gauges host divergence work better. ## Related indicators - [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 - [Ultimate RSI](https://www.luxalgo.com/library/indicator/ultimate-rsi/) (RSI): markdown at https://www.luxalgo.com/library/indicator/ultimate-rsi.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 Candlestick Oscillator](https://www.luxalgo.com/library/indicator/rsi-candlestick-oscillator/) (RSI): markdown at https://www.luxalgo.com/library/indicator/rsi-candlestick-oscillator.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 of Other Sources](https://www.luxalgo.com/library/indicator/rsi-of-other-sources/) (Momentum & Oscillators): markdown at https://www.luxalgo.com/library/indicator/rsi-of-other-sources.md - [Adaptive Bounds RSI](https://www.luxalgo.com/library/indicator/adaptive-bounds-rsi/) (RSI): markdown at https://www.luxalgo.com/library/indicator/adaptive-bounds-rsi.md - [RSI Prediction by Range Segmentation](https://www.luxalgo.com/library/indicator/rsi-prediction-by-range-segmentation/) (RSI): markdown at https://www.luxalgo.com/library/indicator/rsi-prediction-by-range-segmentation.md --- Source: https://www.luxalgo.com/library/indicator/rsi-2/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/