A two-bar RSI swings from extreme to extreme within days, which is exactly why Larry Connors used it for pullbacks. The two period RSI indicator draws that RSI with a three-bar signal line and marks the bar where it climbs back above 10 or drops back below 90.
This build ships as a compiled .ex4 for MT4 and .ex5 for MT5; the screenshots below come from EURUSD H1.
| Platforms | MT4 (.ex4) + MT5 (.ex5) |
|---|---|
| Chart window | Separate window (levels 10 / 90 / 50) |
| Plots | 4: RSI(2), Signal, Buy reversal, Sell reversal |
| Alerts | popup, push notification, email, sound |
| Inputs | 13 |
Its visible parts
Two lines and two marks in a pane.
`RSI(2)` traces dodger blue at width 2.
`Signal` traces goldenrod.
`Buy reversal` sits on the line at the exit from 10.
`Sell reversal` sits on it at the exit from 90.
Guides sit at 10, 50 and 90.
- RSI(2): line, dodger blue, width 2
- Signal: line, goldenrod, width 1
- Buy reversal: arrow, lime, width 2, arrow code 233
- Sell reversal: arrow, red, width 2, arrow code 234
From bar to value
RSI(2)
`RsiPeriod` `2` applies Wilder’s averaging to the last two closes. The line reaches extremes quickly.
Signal
`SignalPeriod` `3` averages the RSI into a slower companion line for reading turns.
Exits
A buy prints when RSI moves from `OversoldLevel` `10.0` or below to above it. `UseTrendFilter` ships `false`; on, buys need the close above a `TrendMaPeriod` `200` bar average.
How to work with it
RSI near 0 means a sharp short-term drop.
RSI near 100 means a sharp short-term rise.
Marks flag exits from those extremes.
`SignalCooldown` `2` spaces same-side marks.
The trend filter keeps only pullbacks in trend.
Warm-up needs only a few bars.
Alert channels in this build: popup, push notification, email and sound, one message per closed bar.
Exits from 10 and 90 report once per closed bar. `EnableAlerts` controls them, and popup delivery is the one route on by default.
Every Two Period RSI Indicator input
Core settings
| Setting | What it does | Default |
|---|---|---|
RsiPeriod |
RSI period (Connors default 2). RSI length, `2`. | 2 |
SignalPeriod |
Signal-line smoothing (SMA of RSI). Signal smoothing, `3`. | 3 |
OversoldLevel |
Oversold reversal zone. Lower zone, `10.0`. | 10.0 |
OverboughtLevel |
Overbought reversal zone. Upper zone, `90.0`. | 90.0 |
UseTrendFilter |
Longs only above / shorts below SMA. Require the 200-bar trend side, `false`. | off |
TrendMaPeriod |
Trend filter SMA period. Trend average length, `200`. | 200 |
SignalCooldown |
Bars between same-side arrows. Bars between same-side marks, `2`. | 2 |
Alert settings
| Setting | What it does | Default |
|---|---|---|
EnableAlerts |
Master alert switch, `true`. | on |
EnablePopup |
Popup, `true`. | on |
EnablePushNotify |
(see inputs panel) | off |
EnableEmail |
(see inputs panel) | off |
EnableSound |
Speaker, `false`. | off |
SoundFile |
(see inputs panel) | alert.wav |
Which markets and timeframes suit it
Connors built RSI(2) for daily stock charts, where each extreme is a short pullback. On the hourly EURUSD screenshot, exits come several times a day. Switch on the trend filter to keep only pullbacks with the trend.
Where it stops working
RSI(2) hits extremes very often.
Without the trend filter, many marks fight the trend.
Exits come after the sharpest bar.
Only the popup starts switched on.
Copy the compiled Two Period RSI Indicator file into your MQL4/Indicators folder, and the MT5 build into MQL5/Indicators, then restart the terminal and drag it onto a chart. The step-by-step guide with screenshots is at how to install MT4 and MT5 indicators.
Background reading on the method behind the Two Period RSI Indicator: Mean Reversion at Investopedia, Relative strength index on Wikipedia.
Download the Two Period RSI Indicator for MT4 and MT5
The zip holds the compiled Two Period RSI Indicator build for MT4 and MT5, plus a short README. Compiled files only, no source. Enter your email below and the download link arrives in your inbox.
Download this indicator free
Enter your email and the file is yours. You also get the full MT4 and MT5 library.
FAQ
Why does RsiPeriod 2 reach the extremes so often?
Two bars is a tiny window, so one strong close can push RSI near 0 or 100. That sensitivity is the point: it flags short pullbacks rather than long trends.
How does UseTrendFilter apply Connors’ 200-bar rule?
It keeps buy marks only when the close sits above the 200-bar average, and sell marks only below it. That follows Connors’ idea of buying pullbacks inside uptrends.
Why is the RSI(2) OversoldLevel set as low as 10?
A two-bar RSI dips below 30 constantly. Ten catches only the sharpest short drops, which is where Connors found pullbacks worth buying in his original testing.
What is the goldenrod Signal line for?
A three-bar average of RSI(2) that makes turns easier to read by eye. The marks come from the blue RSI line itself, not from this smoothed signal.
Are results guaranteed?
No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Two Period RSI Indicator as one input. Always backtest before trading live.
Category: this is part of our Oscillators collection. Browse more Oscillators for MetaTrader, or explore every MT4 indicator and MT5 indicator on the site.
External references
- Learn more about the underlying method in Lock-up period on Wikipedia.
- For wider market background, see Decisionpoint Intermediate Term Volume Momentum Oscillator Itvm at StockCharts ChartSchool.
About the author
Written by Dominic Walsh, a Forex trader and MT4/MT5 indicator, Expert Advisor and script developer. Every tool on forexmt4systems.com is tested on live charts before release and ships with ready-to-use compiled MT4 (.ex4) and MT5 (.ex5) files. Learn more about the trader and developer behind this site.
How we build, test and correct every tool: Editorial & Testing Policy. Trading carries risk; see the disclaimer.