Strategies / Volatility / Stochastic Reversal With Volatility Bands

Stochastic Reversal With Volatility Bands

It goes long after two consecutive higher closes while %K(14) is above 50 and below its 3-bar average, and shorts the mirror setup. Longs also need close above the 5-bar average plus 1.33 times the 15-bar ATR, shorts need close below the lower band.

VolatilityLong & shortIntradayDAX 4030 min

n/aProfit factor

9,210Net profit EUR

36.14%Win rate

3,500Trades

-4,929Max drawdown

2.63Avg trade

Best run of 12. DAX 40, 30 min, spread 3, from run sweeps:2026-10-11-DAX40-30m-opt.tsv:33.

Entry rules, long

The close is above the 5-bar SMA plus 1.33 times the 15-bar ATR, which sets the band state to +1.
Both states must be +1 to buy 1 contract at market.

Entry rules, short

The close is below the 5-bar SMA minus 1.33 times the 15-bar ATR, which sets the band state to -1.
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	3,500	36.14	9,210 EUR	-4,929
USD/JPY	Daily	n/a	230	40.00	1,691,780 USD	-515,270
USD/JPY	30 min	n/a	2,915	38.01	632,900 USD	-183,050
USD/JPY	1 hour	n/a	2,042	39.03	536,650 USD	-215,850
EUR/USD	4 hours	n/a	722	38.23	43,329 USD	-31,562
Silver	4 hours	n/a	493	41.58	42,329 USD	-11,810
Nikkei 225	Daily	n/a	202	42.57	28,394 USD	-22,190
Brent Crude	Daily	n/a	90	36.67	10,684 EUR	-5,924
US Crude Oil	1 hour	n/a	1,555	38.71	5,621 EUR	-4,190
Gold	Daily	n/a	226	37.61	2,086 EUR	-896
Gold	30 min	n/a	3,011	35.77	1,837 EUR	-801
Gold	4 hours	n/a	508	41.34	1,545 EUR	-994

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 Volatility Bands
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Volatility
// Direction: Long & short
// Timeframe tested: 30 minutes
// ==============================================================

DEFPARAM CumulateOrders = false

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

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

52 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

StochasticSMAATR

Read this firstKnown weaknesses2 points

No profit factor is available, because only sweep results exist for this strategy.
The maximum drawdown of 4,929 EUR is large next to the net profit of 9,210 EUR.

Questions

About this strategy

Can I run Stochastic Reversal With Volatility Bands 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 3,500 trades.

How large was the drawdown?

The best run had a maximum drawdown of 4,929 EUR at the tested position size, against a net result of 9,210 EUR.

Does it trade long, short or both?

It trades both long and short.

Trend Surfer

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Heikin Ashi Color Flip

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1.12 PF · 3,692 trades

Bollinger Squeeze

Also a volatility strategy.

14.30 PF · 86 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