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Strategies / Trend / Stochastic Reversal With Regression Intercept

Stochastic Reversal With Regression Intercept

The strategy buys at market when the stochastic reversal state is bullish and the close is above its 14-bar linear regression intercept, and sells short when both are bearish. Positions close when the two states disagree.

TrendLong & shortSwingUSD/JPYDaily
1.43Profit factor
2,565,560Net profit USD
30.81%Win rate
753Trades
-396,690Max drawdown
3,407Avg trade

Best run of 5. USD/JPY, Daily, spread 1, from run pf:2026-10-12-USDJPY-D.tsv:29.

Entry rules, long

  2. The linear regression state turns bullish when the close is above the 14-bar intercept and bearish when it is below.
  3. A long opens at market when both states are bullish and no long position is open.

Entry rules, short

  2. The linear regression state turns bearish when the close is below the 14-bar intercept and bullish when it is above.
  3. A short opens at market when both states are bearish and no short position is open.

Exit rules

  2. An open short closes at market when the two states are no longer both bearish.

Test conditions

PeriodUp to 2026-10-12
InstrumentUSD/JPY, Daily
Spread1 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 tested2026-10-12

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
USD/JPYBest runDaily1.43 75330.812,565,560 USD-396,690
Nikkei 225Dailyn/a 60532.4036,604 USD-13,113
Silver4 hoursn/a 1,74429.1926,347 USD-16,624
GoldDailyn/a 71532.591,367 EUR-1,207
Gold4 hoursn/a 1,71030.701,011 EUR-955

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Stochastic Reversal With Regression Intercept
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Trend
// Direction: Long & short
// Timeframe tested: Daily
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE posrev = 0
ONCE sincebad = 1000
ONCE postwo = 0

ll = lowest[14](low)
hh = highest[14](high)

57 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.

Indicators used

Linear RegressionStochasticSMA
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 Stochastic Reversal With Regression Intercept 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 5 market and timeframe combinations. The best run was USD/JPY, Daily, with a profit factor of 1.43 over 753 trades.

How large was the drawdown?

The best run had a maximum drawdown of 396,690 USD at the tested position size, against a net result of 2,565,560 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.comStatsDocs