Scored Mean-Reversion Entries After Oversold Conditions

Summary

WJ Strategy A builds a mean-reversion entry score from three signals: price below the lower Bollinger Band, price below one of three long moving averages, and a low RSI reading. The components contribute different weights, with the RSI component receiving the largest possible score. A score at or above 2 starts a monitoring phase. Once the score falls below that threshold, the strategy counts periods when the score is flat or declining; after the configured confirmation period, it buys if price is at or above a short entry moving average. A successful entry ends monitoring until a later trigger.

The document supplies script parameters and code but no market, instrument, backtest period, or performance results, so the approach’s effectiveness cannot be judged from the material. It describes fixed cash sizing and permits substantial pyramiding, but the shown logic has no protective stop or rule-based exit; instead, it closes all positions on the final chart bar. The script also depends on chart timeframe for its indicators and confirmation count, so the meaning of “days” depends on the bar interval. These implementation details limit conclusions about live risk and reproducibility.

Key ideas

• The entry score combines lower Bollinger Band breaches, price relative to long moving averages, and low RSI readings.
• A score threshold starts monitoring, and a falling or unchanged score must persist for a configurable number of periods.
• The strategy enters long only when the confirmation count is met and price is above a short moving average.
• The supplied logic specifies position sizing and pyramiding but does not show a protective stop or regular exit rule.
• No backtest results or instrument details are provided, and the confirmation count depends on chart timeframe.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.