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Strategies / Pattern / Stochastic Reversal With Smart Money Index

Stochastic Reversal With Smart Money Index

It goes long after closes rise over 3 bars while %K, read 1 bar back, is above 50 and below its 3-bar average, and shorts the mirror setup. Longs also need the 18-bar average above the index, and shorts need it below.

PatternLong & shortIntradayUSD/JPY10 min
1.18Profit factor
511,990Net profit USD
46.00%Win rate
1,911Trades
-110,870Max drawdown
268Avg trade

Best run of 2. USD/JPY, 10 min, spread 1, from run pf:2026-10-12-USDJPY-10m.tsv:1.

Entry rules, long

  2. Stochastic %K from 1 bar back is below its 3-bar average and above 50, setting the long reversal state.
  3. The 18-bar SMA of a running index, built from intraday and previous daily open-close moves, is above the index.
  4. Both states must be +1 to buy 1 contract at market.

Entry rules, short

  2. Stochastic %K from 1 bar back is above its 3-bar average and below 50, setting the short reversal state.
  3. The 18-bar SMA of a running index, built from intraday and previous daily open-close moves, is below the index.
  4. Both states must be -1 to sell 1 contract short at market.

Exit rules

  2. No stop loss or profit target is set.

Test conditions

PeriodUp to 2026-10-12
InstrumentUSD/JPY, 10 minutes
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 run10 min1.18 1,91146.00511,990 USD-110,870
DAX 4030 minn/a 3,27846.897,446 EUR-5,953

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Stochastic Reversal With Smart Money Index
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Pattern
// Direction: Long & short
// Timeframe tested: 10 minutes
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE posrev = 0
ONCE possmi = 0
ONCE nres = 1

hh = Highest[14](high)
ll = Lowest[14](low)

52 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

StochasticSMA
Read this firstKnown weaknesses2 points
  • A profit factor of 1.18 leaves little room for costs beyond the spread.
  • Results include the spread only. Commissions and overnight financing are not included.

Questions

About this strategy

Can I run Stochastic Reversal With Smart Money Index 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 2 market and timeframe combinations. The best run was USD/JPY, 10 minutes, with a profit factor of 1.18 over 1,911 trades.

How large was the drawdown?

The best run had a maximum drawdown of 110,870 USD at the tested position size, against a net result of 511,990 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