How Mean Reversion V1 works
Mean reversion fades dips back toward the mean. The strategy enters a long only when several conditions align, then targets the Bollinger middle band or VWAP as the take-profit. Designed to profit in sideways and choppy markets where breakout strategies get stopped out repeatedly.
Entry conditions
- RSI ≤ 30 and rising (turning up)
- Price at/below lower Bollinger Band
- Price within 3% of EMA50 (not in a strong downtrend)
- BTC not crashing (24h change > -5%)
- Risk:Reward ≥ 1.5:1 enforced at entry
- One entry per hour per coin (bar cooldown)
Exit conditions
- Take profit: price reaches BB middle band or VWAP
- Stop loss: ATR-based, floor of 1.2%
- Trailing stop: 0.5% drawdown from peak after +1.5%
- Time stop: close after 6 hours regardless of PnL
- RSI failure: exit if RSI recovers above 50 while underwater
- 60-minute cooldown after any stop-out