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Strategies / Mean reversion / Oversold Momentum Reversal Long

Oversold Momentum Reversal Long

Buys when the 9-period momentum oscillator falls below -50 while flat. Closes the long when it rises above 50 or 5 bars after the last reading below -50.

Mean reversionLong onlySwingNasdaq 1004 hours
n/aProfit factor
10,882Net profit EUR
59.72%Win rate
849Trades
-3,548Max drawdown
12.82Avg trade

Best run of 10. Nasdaq 100, 4 hours, spread 3, from run sweeps:2026-10-11-NAS100-4h-opt.tsv:2.

Entry rules, long

  2. A long is opened only when no trade is already open.

Exit rules

  2. Or 5 or more bars have passed since the oscillator was last below -50.

Test conditions

PeriodUp to 2026-10-11
InstrumentNasdaq 100, 4 hours
Spread3 points
Starting capital1,000,000
CostsSpread only. Commissions and overnight financing are not included.
BarsUp to 200,000 bars, fewer where the instrument has less history
Last tested2026-10-11

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
Nasdaq 100Best run4 hoursn/a 84959.7210,882 EUR-3,548
Nikkei 225Dailyn/a 30060.0024,251 USD-13,578
Dow JonesDailyn/a 34460.4718,166 EUR-7,084
SilverDailyn/a 34052.069,189 USD-7,010
DAX 40Dailyn/a 37658.247,428 EUR-5,282
Nasdaq 100Dailyn/a 26461.367,298 EUR-3,474
FTSE 100Dailyn/a 29762.634,361 EUR-2,001
DAX 404 hoursn/a 83860.264,308 EUR-3,450
S&P 500Dailyn/a 35556.341,978 EUR-896
GoldDailyn/a 38052.89623 EUR-440

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Oversold Momentum Reversal Long
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Mean reversion
// Direction: Long only
// Timeframe tested: 4 hours
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE cmo = 0
ONCE bs = -1
ONCE intrade = 0

chg = close - close[1]
up = max(chg, 0)
dn = max(-chg, 0)
sumup = Summation[9](up)
sumdn = Summation[9](dn)
valid = 0

25 more lines: the entry and exit rules.

Setup

How to load it

  1. Copy the code with the copy button on the code block.
  2. In ProRealTime, open a chart of the instrument and timeframe you want to test, then open ProOrder > New trading system and choose "Create with programming".
  3. Paste the code, give the system a name and save it.
  4. Click "Backtest", set your own spread and position size, and run it before you consider trading it live.
Read this firstKnown weaknesses2 points
  • No profit factor is available, because only sweep results exist for this strategy.
  • The code sets no stop loss, so a losing trade stays open until an exit signal arrives.

Questions

About this strategy

Can I run Oversold Momentum Reversal Long in ProOrder?

Yes. The code is ProBuilder and runs as an automated ProOrder system. Backtest it on your own account with your own spread and position size before trading it live.

Which markets was it tested on?

It was tested on 10 market and timeframe combinations. The best run by trade count was Nasdaq 100, 4 hours, with 849 trades.

How large was the drawdown?

The best run had a maximum drawdown of 3,548 EUR at the tested position size, against a net result of 10,882 EUR.

Does it trade long, short or both?

It only takes long trades.

Related

Strategies like this one

Volatility Spike Regression Long

Best run on the same market, Nasdaq 100.

1.22 PF · 1,850 trades

ATR Band

Also a mean reversion strategy.

10.31 PF · 53 trades

Get the full rules, the complete code and the ProRealAlgos portfolio as a member.

Copy trading on US indices is available to ProRealAlgos members as spots open.

Past backtest results do not guarantee future results. This is not financial advice. Curated and maintained by ProRealAlgos. ProRealTime™ is a trademark of ProRealTime SAS. prorealalgos.comStatsDocs