Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 5-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The tested box shows what the rule, a trade against the RSI when it leaves the 70 or the 30 line, did on EUR/USD candles recorded between 29 September and 5 October 2026; it says nothing about what will happen next.
The RSI Law strategy uses the Relative Strength Index with a period of 5, much shorter than the default 14, on 5-minute candles. After the RSI has been at or above 70, the rule sells when it crosses back under 70; after it has been at or below 30, it buys when it crosses back over 30. It enters at the open of the next candle and holds the trade for twice the candle size, 10 to 15 minutes. We replayed that rule on 5-minute EUR/USD candles recorded from 29 September to 5 October 2026: it gave 258 signals, and the 15-minute trades won 108 and lost 149, 42.0% of the decided trades. At an 85% payout a trade needs more than 54.1% to break even, so the rule lost in this sample.
Video tutorial
Quick answer
- Indicator: RSI with a period of 5 (the platform opens it at 14), level lines at 70 and 30.
- Candles: 5 minutes. Other candle sizes work the same way, with a trade of twice the candle size.
- Lower: the RSI was at or above 70 and the candle closes with the RSI back under 70; enter at the open of the next candle.
- Higher: the RSI was at or below 30 and the candle closes with the RSI back over 30; enter at the open of the next candle.
- Expiry: 10 to 15 minutes, twice the candle size; usually 15.
- Tested: 258 signals on EUR/USD 5-minute candles; 15-minute trades won 42.0% of the decided trades (break-even 54.1% at an 85% payout).
How do you set up the RSI Law strategy on IQ Option?
Set the chart
Choose the asset, the chart type and the candle size first: the indicator is calculated from the candles on the chart. The examples in this guide use 5-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find the RSI
Type “RSI” in the Search for indicators box (1) and click Relative Strength Index (RSI) (2). The indicator is listed under Popular and under Momentum.
Step 3: Set the period to 5
The RSI dialog opens on the Set up & apply tab, on Basic settings. The Base line – Period (1) opens at 14: replace it with 5. Leave the Overbought at 70 (2) and the Oversold at 30 (3), then click Apply (4).
Step 4: Use 5-minute candles
Click the candle time period button (1) in the toolbar at the left of the chart; it shows the current period, 5m in the picture. In the menu that opens, choose 5 minutes (2).
Step 5: Read the chart
The RSI panel sits under the price chart. Its title (1) reads RSI (5), the period you set. The RSI line runs between the green line at 70 and the red line at 30 (2); the scale at the right edge of the panel gives 100, 70, 50 and 30. With a period of 5 the line swings from one side of the panel to the other within a few candles.
What does an RSI of 5 candles measure?
The Relative Strength Index compares the average size of the recent up-moves with the average size of the recent down-moves of the close and puts the ratio on a scale from 0 to 100: near 100 the last candles were almost all up, near 0 almost all down. The period is the number of candles the averages look back over. The platform opens the RSI with a period of 14; the strategy uses 5 because an RSI of 5 on a 5-minute chart is very sensitive to recent price changes and ignores earlier behaviour; like every reading of past candles, it says nothing about tomorrow.
The short period has a price: the line spends a lot of time beyond the two level lines. On the 1,324 candles of our recording for which an RSI of 5 exists, it was at or above 70 on 293 (22%) and at or below 30 on 411 (31%). An RSI of 14 on the same candles was at or above 70 on 125 (10%) and at or below 30 on 223 (17%). So the rule below is not an occasional signal: with a period of 5 it gave one about every five candles.
What are the RSI Law entry rules?
The usual reading is that the market is overbought when the RSI is above 70 and oversold when it is below 30, and the rule does not enter while the line is beyond a level but when it comes back. The rules, written so that every condition is checked on closed candles:
| Part | Rule |
|---|---|
| Chart | 5-minute candles, RSI with a period of 5, level lines at 70 and 30 |
| Lower signal | The previous candle closed with the RSI at or above 70 and this candle closes with the RSI under 70 |
| Higher signal | The previous candle closed with the RSI at or below 30 and this candle closes with the RSI over 30 |
| Entry | At the open of the next candle, which is the close of the signal candle |
| Expiry | Twice the candle size, 10 to 15 minutes; usually 15 minutes |
The rule is usually traded as a Digital option with an expiry of 1, 5 or 15 minutes, with at least 10 minutes between the close of the signal candle and the expiry. Our replay scores every trade at a flat 85% payout, like a binary option, so it is only an approximation of the Digital option payout, which changes with the strike.
Two signals of the recording, step by step
The first Higher signal and the first Lower signal in the recording, the first in time order and not picked by outcome. All times are the platform clock, which is UTC minus three hours.
Higher signal, 29 September at 00:15
The platform draws the RSI of a candle at the candle’s close, at its right edge, so frames 1 and 2 sit half a candle to the right of the candle centres. The RSI closed the candle before the signal at 7.3 (1), far under 30. The signal candle (3) opened at 00:15 and closed at 00:20 at 1.136735 with the RSI at 61.0 (2): back over 30, so the rule says Higher. The trade opens at that close, 00:20, and a 15-minute trade ends at 00:35, when the candle (4) closes at 1.136415, 3.2 pips lower. The Higher trade lost, and so did the 10-minute version (exit 1.136620 at 00:30).
Lower signal, 29 September at 01:30
The RSI closed the candle before the signal at 73.7 (1), over 70. The signal candle (3) opened at 01:30 and closed at 01:35 at 1.136200 with the RSI at 41.6 (2): back under 70, so the rule says Lower. A 15-minute trade opened at 01:35 ends at 01:50, when the candle (4) closes at 1.136190. That is one tenth of a pip under the entry, so the Lower trade won, by a margin the chart cannot show; the 10-minute version (exit 1.136160 at 01:45) won by 0.4 pip.
The RSI Law rules, tested
We scored the rule above on the 1,334 five-minute candles of our recording, entering at the close of every signal candle. The table in the box shows the 15-minute trades, the usual choice, the 10-minute trades, and the same rule on 1-minute candles with a 2-minute trade, because the rule is meant to work on other candle sizes if the trade lasts twice the candle.
Tested on IQ Option: the RSI Law rule, RSI 5 on EUR/USD candles of 29 September to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,334 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC and 2026-10-04 21:00 to 2026-10-05 17:00 UTC); 1,505 one-minute candles (2026-10-02 18:23 to 2026-10-02 20:59 UTC and 2026-10-04 21:01 to 2026-10-05 19:28 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | The rule on closed candles, the option opening at the close of the signal candle: Lower on the candle where the RSI (period 5) falls back under 70 after being at or above it, Higher on the candle where it rises back over 30 after being at or below it. The box lists the 15-minute trade, the 10-minute trade and the same rule on 1-minute candles with a 2-minute trade. |
| Signals | RSI(5) leaves 70/30, 5-minute candles, 15-minute trade: 258 signals (134 Higher, 124 Lower) RSI(5) leaves 70/30, 5-minute candles, 10-minute trade: 259 signals (135 Higher, 124 Lower) RSI(5) leaves 70/30, 1-minute candles, 2-minute trade: 297 signals (157 Higher, 140 Lower) |
| Outcomes | RSI(5) leaves 70/30, 5-minute candles, 15-minute trade: 108 won, 149 lost, 1 tied; 42.0% of the 257 decided trades won; net −$0.22 per $1 staked at 85% (−$0.20 at 91%) RSI(5) leaves 70/30, 5-minute candles, 10-minute trade: 114 won, 143 lost, 2 tied; 44.4% of the 257 decided trades won; net −$0.18 per $1 staked at 85% (−$0.15 at 91%) RSI(5) leaves 70/30, 1-minute candles, 2-minute trade: 121 won, 168 lost, 8 tied; 41.9% of the 289 decided trades won; net −$0.22 per $1 staked at 85% (−$0.20 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
All three readings lost: 42.0% (15 minutes), 44.4% (10 minutes) and 41.9% (1-minute candles). With 257 decided trades one standard error is about 3 points, so the 15-minute figure is well below 50% and far below the 54.1% needed at an 85% payout. In our sample the price went on in the direction it had been moving more often than it turned back: after a fall that took the RSI under 30 and back over it, the next 15 minutes ended lower more often than higher. That is a description of four and a half days of one pair, not a rule of the market, and trading the opposite way would be picking the rule after seeing the answer.
Pros and Cons of the RSI Law strategy
| Pros | Cons |
|---|---|
| Simple: one indicator, one change in the period, two levels. | A period of 5 puts the line beyond a level on about half of the candles, so signals are frequent and many are noise. |
| Reacts at once to the latest candles. | In the recording, entering against the move lost: 42.0% at 15 minutes. |
| Works with the Digital expiries of 1, 5 and 15 minutes. | The rule gives no way to tell a reversal from a trend that continues. |
Common mistakes
- Entering when the RSI touches 70 or 30. The rule waits for the candle on which the RSI comes back across the line.
- Keeping the default period of 14. The numbers of the strategy, and the numbers on this page, are for a period of 5.
- Using an expiry shorter than the rule asks for. The rule asks for at least 10 minutes between the close of the signal candle and the expiry.
- Trading it in a strong trend. False signals and the need for another tool are the known weak points of the rule; in our recording the trades against the move lost more than they won.
Related guides
- RSI on IQ Option and Bollinger Bands with the RSI
- RSI, Stochastic and EMA 200 and RSI, EMA and engulfing candles
- Overbought and oversold markets
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is the RSI Law strategy?
A: A strategy that uses an RSI with a period of 5 on 5-minute candles: sell when the RSI crosses back under 70, buy when it crosses back over 30, and hold the trade for twice the candle size.
Q: What RSI period does it use?
A: A period of 5. The platform opens the RSI at 14, so change it in the dialog before you read the line.
Q: How long should the trade last?
A: Twice the candle size: 10 to 15 minutes on 5-minute candles, usually 15. In our replay 15 minutes won 42.0% and 10 minutes 44.4% of the decided trades.
Q: Does the RSI Law strategy win?
A: Not in our replay. On 5-minute EUR/USD candles from 29 September to 5 October 2026 it gave 258 signals and the 15-minute trades won 108 and lost 149. Four and a half days of one pair prove nothing, but they are a reason to test any such rule on a Practice balance first.
Q: Which candle size does it use?
A: The rule uses 5 minutes and can be used on other sizes if the trade lasts twice as long as the candle. We also replayed 1-minute candles with a 2-minute trade: 41.9% of the decided trades won.
Q: Can I use the RSI Law on binary options?
A: It is usually traded as Digital options. Our replay uses a flat 85% payout like a binary option. Whether it helps on a real payout is something to check on the Practice balance.
