Strategies / Mean reversion / Smoothed RSI Reversal With Stops

Smoothed RSI Reversal With Stops

Trades reversals of a smoothed RSI, buying when it crosses above 30 and selling short when it crosses below 70. Positions also carry a 5% target and a 2% stop measured from the signal bar close.

Mean reversionLong & shortSwingGBP/USD4 hours

1.43Profit factor

13,755Net profit USD

50.50%Win rate

202Trades

-2,533Max drawdown

68.09Avg trade

Best run of 10. GBP/USD, 4 hours, spread 1.5, from run pf:2026-10-12-GBPUSD-4h.tsv:1.

Entry rules, long

A long entry reverses any open short position.

Entry rules, short

A short entry reverses any open long position.

Exit rules

The smoothed RSI crossing above 30 closes a short and opens a long.
A long also closes at market if the close moves 5% above or 2% below the signal close.
A short also closes at market if the close moves 5% below or 2% above the signal close.

Test conditions

Period	Up to 2026-10-12
Instrument	GBP/USD, 4 hours
Spread	1.5 points
Starting capital	1,000,000
Costs	Spread only. Commissions and overnight financing are not included.
Bars	Up to 200,000 bars, fewer where the instrument has less history
Last tested	2026-10-12

Every run

Markets and timeframes tested

Market	Timeframe	PF	Trades	Win %	Net	Max DD
GBP/USDBest run	4 hours	1.43	202	50.50	13,755 USD	-2,533
Dow Jones	3 min	n/a	400	61.00	11,241 EUR	-4,662
Dow Jones	5 min	n/a	451	60.09	9,361 EUR	-8,004
Dow Jones	4 hours	n/a	59	44.07	8,810 EUR	-5,072
US Crude Oil	2 min	n/a	455	56.70	6,311 EUR	-2,905
FTSE 100	10 min	n/a	456	63.60	3,565 EUR	-1,557
Brent Crude	1 min	n/a	448	56.70	3,073 EUR	-2,901
Brent Crude	Daily	n/a	32	43.75	1,796 EUR	-1,685
FTSE 100	Daily	n/a	37	37.84	1,152 EUR	-876
S&P 500	1 min	n/a	247	62.35	753 EUR	-379

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Smoothed RSI Reversal With Stops
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Mean reversion
// Direction: Long & short
// Timeframe tested: 4 hours
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE sl = 0
ONCE tp = 0

myRsi = RSI[14](close)
mm = Average[14](myRsi)

26 more lines: the entry and exit rules.

Setup

How to load it

Copy the code with the copy button on the code block.
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".
Paste the code, give the system a name and save it.
Click "Backtest", set your own spread and position size, and run it before you consider trading it live.

Indicators used

RSISMA

Read this firstKnown weaknesses2 points

The code sets no stop loss, so a losing trade stays open until an exit signal arrives.
Results include the spread only. Commissions and overnight financing are not included.

Questions

About this strategy

Can I run Smoothed RSI Reversal With Stops 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 was GBP/USD, 4 hours, with a profit factor of 1.43 over 202 trades.

How large was the drawdown?

The best run had a maximum drawdown of 2,533 USD at the tested position size, against a net result of 13,755 USD.

Does it trade long, short or both?

It trades both long and short.

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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.com Stats Docs