RSI Mean Reversion — Strategy by kparicharak92615
By kparicharak92615
Performance Metrics
- Author: kparicharak92615
- Symbol: MCX:NATGASMINI1!
- Timeframe: 4 hours
- Net P&L: +525,410.00 INR (+263.90%)
- Win Rate: 56.3%
- Profit Factor: 1.72
- Max Drawdown: 90,310.00 INR (26.59%)
- Total Trades: 380
Description
This is classic Mean Reversion Strategy. I use this on commodities.This strategy trades mean reversion signals based on the Relative Strength Index (RSI). It is designed for volatile, mean-reverting instruments where price tends to snap back after reaching extreme levels.How it works:The strategy enters a long position when RSI crosses back above the oversold level, signalling that the selling pressure is fading and price is beginning to recover. It enters a short position when RSI crosses back below the overbought level, signalling that buying pressure is weakening and price is starting to pull back. Positions are reversed — a long is closed when a short signal fires and vice versa.Key feature: Signals trigger when RSI re-enters the normal channel from an extreme zone, not when it first enters the extreme zone. This provides confirmation that the reversal has begun rather than catching a falling knife.Recommended usage: This strategy works best on volatile instruments that exhibit mean-reverting behaviour, such as Natural Gas futures on the 4-hour timeframe. A short RSI period (3-5) with oversold levels around 30-40 and overbought levels around 70-80 is a good starting point. Optimise the parameters for your specific instrument using backtesting.Settings: RSI period, oversold level, overbought level, trade direction (Long Only / Short Only / Both), and bar confirmation toggle are all configurable from the settings panel. Alerts are built in for both buy and sell signals.