Strategies / Pattern / Stochastic Reversal With Relative Volatility

Stochastic Reversal With Relative Volatility

It goes long after two consecutive higher closes while stochastic %K is above 50 and below its 3-bar average, and shorts the mirror setup. Longs also need the relative volatility index above 70, and shorts need it below 30.

PatternLong & shortIntradayDAX 4030 min

n/aProfit factor

7,914Net profit EUR

38.52%Win rate

1,833Trades

-5,436Max drawdown

4.32Avg trade

Best run of 12. DAX 40, 30 min, spread 3, from run sweeps:2026-10-11-DAX40-30m-opt.tsv:40.

Entry rules, long

The relative volatility index, using 10-bar standard deviation smoothed over 14 bars, is above 70.
Both states must be +1 to buy 1 contract at market.

Entry rules, short

The relative volatility index, using 10-bar standard deviation smoothed over 14 bars, is below 30.
Both states must be -1 to sell 1 contract short at market.

Exit rules

No stop loss or profit target is set.

Test conditions

Period	Up to 2026-10-11
Instrument	DAX 40, 30 minutes
Spread	3 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	2026-10-11

Every run

Markets and timeframes tested

Market	Timeframe	PF	Trades	Win %	Net	Max DD
DAX 40Best run	30 min	n/a	1,833	38.52	7,914 EUR	-5,436
USD/JPY	Daily	n/a	106	45.28	2,365,530 USD	-659,900
USD/JPY	30 min	n/a	1,664	38.46	466,600 USD	-227,180
USD/JPY	10 min	n/a	1,736	39.80	412,310 USD	-165,270
Nikkei 225	Daily	n/a	89	44.94	37,762 USD	-13,443
Silver	4 hours	n/a	264	39.77	23,652 USD	-16,316
Dow Jones	15 min	n/a	1,519	39.37	15,546 EUR	-9,134
Brent Crude	Daily	n/a	41	36.59	9,549 EUR	-5,893
Nasdaq 100	Daily	n/a	94	42.55	8,292 EUR	-8,193
Gold	Daily	n/a	96	41.67	2,280 EUR	-1,346
Gold	1 hour	n/a	1,080	39.35	2,258 EUR	-1,296
Gold	30 min	n/a	1,642	40.19	1,776 EUR	-753

Charts

Results by run

Top 10 of 12 runs. The full list is in the table above.

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Stochastic Reversal With Relative Volatility
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Pattern
// Direction: Long & short
// Timeframe tested: 30 minutes
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE posrev = 0
ONCE sincebad = 1000
ONCE postwo = 0
ONCE nu = 0
ONCE nd = 0

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

62 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

StochasticSMAStandard DeviationWilder Average

Read this firstKnown weaknesses2 points

No profit factor is available, because only sweep results exist for this strategy.
The maximum drawdown of 5,436 EUR is large next to the net profit of 7,914 EUR.

Questions

About this strategy

Can I run Stochastic Reversal With Relative Volatility 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 12 market and timeframe combinations. The best run by trade count was DAX 40, 30 minutes, with 1,833 trades.

How large was the drawdown?

The best run had a maximum drawdown of 5,436 EUR at the tested position size, against a net result of 7,914 EUR.

Does it trade long, short or both?

It trades both long and short.

Trend Surfer

Uses the same indicator.

1.04 PF · 10,813 trades

Heikin Ashi Color Flip

Best run on the same market, DAX 40.

1.12 PF · 3,692 trades

Breakout Reversal

Also a pattern strategy.

n/a PF · 459 trades

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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