Mean reversion · Beginner · Weekly check — occasional signals
RSI Oscillator MR
How it works, and when it doesn't.
RSI < 30 in an uptrend is a fear signal, not a reversal. Institutions are selling on emotion — not fundamentals. The rational trade is to buy their panic.
RSI(14)=48.2 neutral (40-60 range). No mean reversion setup present.
Why it works
RSI measures the ratio of recent gains to recent losses on a 0-100 scale. Below 30 means selling has been extreme relative to buying. Combined with a 200-day SMA filter to confirm we're in an uptrend, oversold bounces in bull markets are highly reliable.
The signal logic
- Compute RSI(14) on daily close prices
- Filter: confirm 200-day SMA is rising (uptrend filter)
- Long when RSI < 30 AND in uptrend — statistically oversold in a bull market
When it fails
RSI < 30 in a downtrend is genuinely bearish. The filter is everything — without the 200-day SMA gate you catch falling knives.
- Best market
- Bull market dips, corrections within uptrends
- Worst market
- Genuine bear markets where RSI stays below 30 for months
Backtest
| Sharpe ratio | 0.17 |
| Annual return | 0.8% |
| Worst drawdown | -17.3% |
| Trades in the backtest | 20 |
Backtest on daily bars, positions taken the bar after the signal (no look-ahead).
RSI Oscillator MR, live.
Re-scored after every close.
The platform runs this and 32 other strategies against the live tape each day — with the evidence behind every number.