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08/20 15:01
RSI Bottom/Top Retest Scalper [josseliani]
Instead, the indicator waits for RSI to leave the extreme area, cool down, form a second structured signal, and then waits for confirmation from price.
The logic is separated into two parts:
→ RSI setup
→ Price entry confirmation
How it works
For a bearish setup:
→ RSI first reaches the upper extreme area.
→ RSI cools down below the selected cooling level.
→ A second local RSI peak forms below the first peak.
→ The second RSI signal is confirmed when RSI starts turning down.
→ Price is then checked against the selected confirmation line.
→ A candle must place the required percentage of its body beyond that line.
→ That candle confirms and arms the setup.
→ The trade calculation starts from the OPEN of the next candle .
The bullish logic is the opposite: RSI forms an extreme bottom, rebounds, returns with a higher second bottom, and price must then confirm above the selected line.
RSI signals
The RSI setup is shown in two stages.
→ The circle marks the first RSI extreme.
→ The triangle marks the confirmed second RSI signal after the cooling and retest process.
These two markers belong to the RSI setup itself . They are not price-entry signals.
Price entry confirmation
After the second RSI signal, the script searches for price confirmation using the selected confirmation line.
A candle must place the required percentage of its body beyond that line.
This candle confirms and arms the setup , but it is not used as the entry candle.
The hollow entry arrow and trade calculation appear on the next candle , using that candle's open as the reference entry price.
So the sequence is:
→ 1 — Circle: first RSI extreme
→ 2 — Triangle: second RSI retest signal
→ 3 — Price confirmation and entry
Trade markup
When Trade Markup is enabled, the script automatically displays:
→ Stop Loss
→ 1R
→ 2R
The stop is normally derived from the price structure formed between the RSI retest signal and the price-confirmation event.
If a suitable structural stop cannot be established, or if the calculated risk is too small to be practical, the script can use an ATR-based fallback stop.
The 1R and 2R levels are calculated from the confirmed entry price and the resulting risk distance.
These levels are visual planning references. They are not predictions that price will necessarily reach a target.
Confirmation line
The confirmation line can be selected from:
→ EMA
→ SMA
→ WMA
→ RMA / SMMA
→ VWMA
→ HMA
→ DEMA
→ TEMA
→ ZLEMA
→ KAMA
→ Kalman
→ ALMA
→ Kijun
The default confirmation line is Kijun 34 .
The user can also select how much of the candle body must be beyond the confirmation line before the setup is considered confirmed.
How I use it
The default settings are tuned for 5-minute gold scalping .
I use Kijun 34 as the default confirmation line because I personally like this line a lot. I use it for both 5-minute and 15-minute scalping.
If you move to a lower timeframe, expect more signals, but also more noise. In that case, pay closer attention to entries and Stop Loss placement and consider using a shorter, faster confirmation line.
The script includes a wide selection of moving averages for scalpers, including some less conventional alternatives.
Besides Kijun, I also like ALMA for scalping. On the 1-minute chart I often use a shorter ALMA because it reacts faster, but this naturally creates a more aggressive trading style.
As a general approach:
→ Lower timeframe → shorter / faster confirmation line → more signals and more noise.
→ Higher timeframe → longer / slower confirmation line → fewer and more selective signals.
You can replace Kijun with EMA, ALMA or another available line and adjust its length for the market and timeframe you trade.
Main settings
→ RSI Length and Source
→ Upper and Lower Extreme Levels
→ Cooling Levels
→ Second Peak / Bottom Re-Entry Levels
→ Minimum Lower High / Higher Low Gap
→ Peak / Bottom Strength
→ Maximum Setup Search Window
→ Optional Midline Invalidation
→ Confirmation Line Type and Length
→ Required Body Beyond Line %
→ Entry Search Window
→ Signal Display
→ Trade Markup
→ RSI / Chart Highlighting
Important
Local RSI peaks and bottoms require confirmed bars on their right side before they can be identified.
For this reason, a second peak or bottom is marked only after its required confirmation is available.
The indicator separates the oscillator setup from price confirmation so that an RSI retest alone is not automatically treated as a trade entry.
The trade levels shown on the chart are generated from the detected setup and are intended for analysis and trade planning. They do not guarantee future performance.
Why the second signal?
The general idea of paying attention to a second oscillator signal has also been discussed in professional technical-analysis research.
Mohamed Ashraf, MFTA, CFTe, CETA presented The Stochastic Oscillator Second Signal through the International Federation of Technical Analysts (IFTA), examining the second oscillator signal as a distinct technical setup across different timeframes and market conditions.
This script does not reproduce that methodology. The referenced work uses the Slow Stochastic Oscillator, while this indicator applies its own RSI-based logic using extreme levels, cooling, second-peak / second-bottom structure and subsequent price confirmation.
Reference
IFTA Journal 2026 — The Stochastic Oscillator Second Signal
www.ifta.org
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