Reversion Guard | RSI + Bollinger Band [Customizable] — Strategy by blitz_locked
By blitz_locked
Performance Metrics
- Author: blitz_locked
- Symbol: AMEX:XLU
- Timeframe: 1 day
- Win Rate: 70.4%
- Profit Factor: 2.039
Description
What This Strategy DoesThis strategy looks for mean-reversion setups by requiring two independent signals to agree: price must be stretched beyond a Bollinger Band, and RSI must confirm oversold/overbought momentum at the same time. Using both together filters out the common false signal where price touches a band during a strong trend but RSI shows no real exhaustion: a scenario where band-only or RSI-only entries tend to get caught offside.This is built as a transparent, fully configurable framework rather than a fixed system: every filter below defaults to off, so you can test each one's individual contribution to your specific needs.Core Entry LogicLong: price closes below the lower Bollinger Band while RSI is simultaneously oversoldShort: price closes above the upper Bollinger Band while RSI is simultaneously overboughtOptional bar-close confirmation prevents intrabar repainting, so backtest signals match what you'd actually see liveExit Modes (selectable)Middle-band reversion (exit once price returns to the average)Opposite-band ride (hold for the full mean-reversion swing)RSI-50 momentum normalization (exit once momentum resets, independent of price location)Optional FiltersTrend filter (EMA) — restricts trades to align with the broader trend direction. Meaningfully reduces losses on trending instruments, at the cost of fewer signals — recommended for volatile, trend-prone names.Volatility squeeze filter — avoids entering during abnormally low-volatility compression, which historically tends to precede breakouts rather than reversions.Risk ManagementATR-based stop-loss that scales to each instrument's own volatility, rather than a fixed % or dollar distanceRisk-based position sizing when the stop is active (define % of equity risked per trade; share size is derived from the stop distance)Fixed % of equity fallback sizing when the stop is disabled, so exposure is always bounded by an explicit, visible settingBuilt-in commission and slippage assumptions in the strategy settings, so backtest results reflect realistic trading costs rather than a frictionless best-caseVisual AidsBand and midline plotting with shaded expected rangeBackground color intensity reflects a composite "signal strength" score (how far price has stretched beyond the band, combined with how extreme RSI is) - visual