Short-Term SMA Mean Reversion with RSI Filters

Summary

This short-term strategy uses the relationship between fast and slow simple moving averages to identify price deviations, with RSI as a signal filter. Its example buys when the 2-period SMA falls 3% below the 5-period SMA and the smoothed 5-period RSI is below 30. It exits a long when the fast SMA crosses above the slow SMA. The described short setup uses an upper deviation threshold and an RSI reading above 70, with a corresponding moving-average cross for exit.

The document presents the rules and configurable parameters, and reports that historical backtests were good, but provides no performance figures or detailed validation. The published backtest settings refer to BTC/USDT futures over a stated period, while the parameter defaults specify a different date range, leaving the evidence difficult to assess. Mean reversion can fail during sharp moves; poor parameter choices may overtrade or miss opportunities. The document recommends stop losses and parameter evaluation, but does not quantify their effects.

Key ideas

• A fast SMA falling sufficiently below a slower SMA can trigger a long entry when RSI is oversold.
• A fast SMA crossing back above the slower SMA serves as the stated long exit signal.
• The short setup uses an upper deviation threshold and an overbought RSI filter.
• The document reports favorable historical testing but gives no quantified performance evidence, and its date settings are inconsistent.

Tags

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