Value Area Rejection Strategy by AIScripts
By AIScripts
Performance Metrics
- Author: AIScripts
- Symbol: NASDAQ:MSTR
- Timeframe: 1 day
- Net P&L: +10,724.44 USD (+10.72%)
- Win Rate: 36.7%
- Profit Factor: 1.19
- Max Drawdown: 7,010.36 USD (6.69%)
- Total Trades: 229
Description
This strategy identifies an equilibrium zone using a rolling average price range and looks for rejection when price moves into that zone but fails to hold inside it.The idea is simple:Markets often rotate around fair valueIf price enters value and quickly rejects, it can signal directional intent.The strategy trades the move away from that rejected value areaHow It Works1. Build the Value AreaA rolling average price forms the center of value.An ATR-based band creates:Upper Value BoundaryLower Value Boundary2. Detect RejectionA trade is considered when:Bullish RejectionPrice dips into/below lower value areaCloses back above the lower boundaryBearish RejectionPrice moves into/above upper value areaCloses back below the upper boundary3. Risk ManagementATR-based stop-loss and take-profit:Adaptive to market volatilityFixed risk-to-reward structureLogic SummaryA rolling SMA acts as the value midpointATR bands create upper/lower value boundariesLong entries occur when price rejects below value and closes back insideShort entries occur when price rejects above value and closes back insideRisk HandlingATR-based stop-loss adapts to volatilityFixed risk/reward target keeps trade structure consistentBest Use CasesRotational marketsPullback environmentsValue-to-imbalance transitionsNotesThis is a simplified value-area model intended for testing and educational use. It approximates equilibrium behavior and is not a replacement for full market profile or exchange volume profile tools.