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Strategies / Mean reversion / Stochastic RSI Bracket Reversal

Stochastic RSI Bracket Reversal

The strategy trades oversold and overbought readings that line up across stochastic, RSI and Awesome Oscillator momentum. It buys when the smoothed %K is below 20 with RSI(10) below 30, and sells short on the mirror setup, using ATR(14) based stops and targets.

Mean reversionLong & shortSwingS&P 5004 hours
n/aProfit factor
347Net profit EUR
54.47%Win rate
514Trades
-285Max drawdown
0.68Avg trade

Best run of 3. S&P 500, 4 hours, spread 1, from run sweeps:2026-10-11-USA500-4h-opt.tsv:93.

Entry rules, long

  2. RSI(10) is below 30.
  3. The Awesome Oscillator, the 5-bar average minus the 34-bar average of the median price, is higher than on the prior bar.

Entry rules, short

  2. RSI(10) is above 70.
  3. The Awesome Oscillator is lower than on the prior bar.

Exit rules

  1. A long stop sits signal close minus signal low plus ATR(14) below the entry price.
  2. A short stop sits signal high minus signal close plus ATR(14) above the entry price.
  4. An opposite signal closes the trade and reverses it.

Test conditions

PeriodUp to 2026-10-11
InstrumentS&P 500, 4 hours
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 tested2026-10-11

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
S&P 500Best run4 hoursn/a 51454.47347 EUR-285
Silver4 hoursn/a 41254.137,969 USD-3,918
Brent Crude4 hoursn/a 24158.512,127 EUR-831

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

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

DEFPARAM CumulateOrders = false

ao = Average[5](MedianPrice) - Average[34](MedianPrice)
hh = highest[14](high)
ll = lowest[14](low)

26 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

ATRAwesome OscillatorRSISMAStochastic
Read this firstKnown weaknesses2 points
  • No profit factor is available, because only sweep results exist for this strategy.
  • The maximum drawdown of 285 EUR is large next to the net profit of 347 EUR.

Questions

About this strategy

Can I run Stochastic RSI Bracket Reversal 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 3 market and timeframe combinations. The best run by trade count was S&P 500, 4 hours, with 514 trades.

How large was the drawdown?

The best run had a maximum drawdown of 285 EUR at the tested position size, against a net result of 347 EUR.

Does it trade long, short or both?

It trades both long and short.

Related

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Trend Surfer

Uses the same indicator.

1.04 PF · 10,813 trades

CCI Sign With EMA Alignment

Best run on the same market, S&P 500.

1.23 PF · 1,253 trades

ATR Band

Also a mean reversion strategy.

10.31 PF · 53 trades

See how ProRealAlgos combines strategies like this into one automated portfolio.

Copy trading on US indices is available to ProRealAlgos members as spots open.

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