RSI Reverse Scalping (M5)

A disciplined M5 mean‑reversion play using RSI.
We hunt short‑term overextensions: when RSI leaves 70/30 back inside, price reclaims a micro level, and the tape shows loss of momentum, we fade toward the mean.

Tools

• RSI(14, M5) — overbought/oversold and re‑entry.
• Optional EMA(20) or VWAP as the mean.
• ATR(14) for stop/size; session levels for context.

Market logic

Overextensions often snap back to the mean unless a trend day is in progress. We avoid chasing extremes and wait for re‑entry + structure reclaim.

Setup checklist

1. Stretch: price pushes beyond a local swing and RSI hits ≥70 / ≤30.
2. Re‑entry: RSI crosses back inside (from >70 to <70 for shorts; <30 to >30 for longs).
3. Structure: price reclaims the broken level or shows a failed push (small bodies, longer tails).

Trigger

• Short: bearish engulfing/rejection as RSI slips below 70 again and price closes back under the level.
• Long: bullish engulfing/rejection with RSI back above 30 and a close above the level.

Entry

• Enter on close of the trigger bar, or use a limit on a shallow retest of the reclaimed level.

Stop Loss

• Beyond the recent extreme or ATR(14) × 1.0–1.4 (whichever is wider).
• Invalidate if RSI re‑tags extreme and closes with it.

Take Profit / Management

• Base: scale ½ at 1.0R–1.2R.
• Runner: trail toward EMA20/VWAP or prior micro‑range mid.
• Flatten into session highs/lows or when RSI returns to 50±5.

Filters & risk

• Stand aside on trend days (price hugging EMA20/VWAP).
• Avoid news windows (±30–60 min).
• Risk ≤ 0.25%–0.5%; one active position per symbol.