RSI Reversals with R-Based Sizing and Configurable Stop Methods
Summary
This template uses RSI threshold crossings to generate mean-reversion entries: a move below the oversold level signals a long, while a move above the overbought level signals a short. For each position, it calculates a stop using a fixed price distance, ATR multiple, percentage, or tick amount. The profit target is then set as a chosen multiple of the entry-to-stop distance, and quantity is calculated from a specified share of current equity divided by the estimated per-unit risk.
The script plots entry, stop, target, and shaded risk/reward zones, and displays trade counts, win rate, cumulative R, streaks, and net profit. These displays are bookkeeping rather than evidence of strategy quality. The document gives no tested market, timeframe, costs, or results; the RSI rules and sizing formula also depend on valid stop distances and instrument point values. Its R statistics simplify outcomes around planned risk and target, so they should not be treated as a complete measure of realized trade risk.
Key ideas
- RSI threshold crossings provide the template’s long and short entry signals.
- Stops can use fixed distances, ATR, percentages, or ticks, with targets defined as multiples of initial risk.
- Position size is derived from an equity risk allowance and the stop distance adjusted by point value.
- The displayed R statistics and win rate do not establish profitability or account for all execution effects.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.