(binned per thread starter’s request) reversionX: A Rule-Based

I had a few losing trades today.
Here is one example:

Also have this one running on the daily tf.
As it arrived to 1R I moved sl to BE, and now it's just a waiting game.

Clean setup but a losing one... All I want to say is keep track/Journal of the trades

Would that be a correct Entry?

I have a question:
In a setup like the one of CogAlpha just posted, how do you determine the placement of the SL?

Same situation here:

A few observations: the confirmation came after 9 candles, which isn’t ideal from a timing perspective. However, if you had taken the trade, it was a killer setup. I assume you analyzed and unloaded the chart well before the candle closed, as the confirmation came afterward. and its a killer sell setup

But let’s say you got confirmation like the one you posted—
This is where experience comes into play. You can clearly see that the recent high, where the initial sell signal formed, is being broken, and the price is moving bullishly. Despite that, both the MACD and TTM indicators are still signaling a sell. If you're uncertain in situations like this, it's wiser to skip the setup and look for another opportunity or wait for additional confirmation. For instance, you could wait for the MACD to turn red again or for a bearish price action candle to form. Taking a sell without a defined, objective stop-loss is risky. In this case, I would lean toward either skipping the setup or waiting for clearer confirmation before entering the trade, which we got afterwards.

Although the stop loss was large and it took a while, the trade worked out nicely.

Thank you very much for your reply Rishee.
I appreciate the time you take to help us with the strategy.

On my chart, there are a few arrows, so the entry is a bit closer to the last signal.

If I understand it correctly, if there is no clear swing high to use as a SL, we are still bullish.
So if PA is still bullish, we don't follow the indicators blindly but wait for the PA to start moving downwards,
Is this correct?

I took your advice to heart and started a trading journal dedicated to this strategy.
So far, I have had more losers than winners and many BE trades, even though my entries were according to the rules.

Could the reason be that I am entering mechanically without considering PA?

Anyway, I'll keep journaling and post results and see how it goes.

Last trade of the week. With a wide stoploss and it being Friday afternoon, I decided to exit early with a 1R return.

Yes, PA definitely matters — because, unlike indicators, price action is real-time and current. But it’s also important to remember that PA is subjective — different traders can interpret the same chart in different ways. That’s why it’s often best to stick to the clearest, most obvious setups where there’s little room for doubt.
One way to improve decision-making is by using multi-timeframe analysis — it helps add context and filters out weak trades that may look good on a single chart but lack strength on the bigger picture. Another way is to add confluences like divergences and candle stick patterns as well..

Also, your journal — that’s awesome. Logging trades consistently is hands down one of the fastest ways to improve. And yes, you nailed it — entering trades mechanically without considering PA or overall context is a common trap. Even when the rules are followed perfectly, the outcome can still suffer if the setup isn’t supported by momentum or structure. So you’re not doing anything wrong. You’re just learning that timing, context, and confluence matter just as much as the signal itself. Keep journaling, keep observing — and over time, your confidence and intuition will sharpen naturally.

Recent Research on Mean Reversion — Built for Retail Trading, Reflected in reversionX

Hey traders,

Let’s take a moment to clarify what reversionX actually is, because it’s not just a trading script or an entry signal. It’s a framework. A concept. A rule-based lens for spotting stretched moves and fading momentum with structure, not emotion. It’s also not a plug-and-play system. This isn’t one of those strategies you blindly follow with hopes of a 90% win rate. You still need discretion, patience, and context. reversionX is about giving you a clear edge — and letting you trade it with discipline.

The Research That Supports It - https://www.researchgate.net/publication/381942833_Design_and_Development_of_Mean_Reversion_Strategies_on_QuantConnect_Platform

Recently, I reviewed a study titled "Design and Development of Mean Reversion Strategies on QuantConnect Platform" (2024) from WorldQuant University.
This research explored mean reversion using:

1. MACD to detect weakening momentum
2. RSI to identify overbought/oversold conditions
3. Real-world retail constraints — slippage, commissions, Kelly position sizing
4. Metrics like Sharpe Ratio (1.758) and profit-to-loss ratio (1.88)

The strategies were built and tested using QuantConnect and Interactive Brokers modeling, making the findings relevant for actual traders, not just academic theory.
Where reversionX Aligns
reversionX shares the same backbone:

1. Overextended price action
2. Fading momentum
3. Layered confirmation with logical filters

However, there are two key differences:
The research did not use Bollinger Bands, though they were discussed in the theory section as a valid tool (pg. 6–7).
TTM Squeeze was not part of the paper at all.
The research focused on RSI levels and MACD signal distance to find entries, with performance based on momentum shift, not price structure.

How reversionX Expands the Concept
reversionX builds on the same idea, but brings in visual tools and early entry structure:

1. Bollinger Bands are used to identify extreme moves. We look for price to close outside the bands and then re-enter, giving us a visual and timely entry, before MACD flips or RSI cools off too much.
2. TTM Squeeze helps avoid momentum traps. If momentum is still expanding against the setup (e.g., green dot + red histogram on a long), we filter it out. It's not about waiting for the squeeze to fire — it's about not stepping in front of it.

The end result is a strategy that’s transparent, rule-based, and easy to read in real time, with signals you can explain, journal, and tweak.

Final Thoughts
reversionX is not magic. It’s not bulletproof. And it’s not one-size-fits-all. But it is a well-structured way to trade one of the most statistically valid patterns in markets — mean reversion — using tools that are supported by research and tested in retail conditions. So whether you’re using reversionX as-is or just borrowing parts of the logic for your own trading, the goal is the same: structure, clarity, and discipline. So let me know how it’s working for you. Let’s keep it smart, transparent, and research-backed.

Memorial Day isn’t the best day to trade due to a lack of momentum, but this setup still looks decent.

Hello everyone. Took three trades yesterday, two wins on CHFJPY and one loss on GBPUSD. Could have taken profit earlier on GBPUSD but I'm moving stop to breakeven +1 at 1:1 and targeting 1:2.

Awesome Eskflyer... keep them coming...

I typically avoid jumping back in right away, but I decided to re-enter the trade since the rules are still valid, and the MACD is consistently losing strength.

Trade 1 – Classic textbook setup.
Trade 2 – Invalid. By the time we got confirmation, the price had already crossed the basis line (like the Bollinger Bands), leaving little room for further movement. As I always say, just because it played out in hindsight doesn’t mean it was a good trade. This could be an example of hindsight bias.
Trade 3 – Technically invalid because the price crossed and closed below the basis line. However, if you still took the trade, it resulted in a loss.
Trade 4 – Classic setup.

Interesting setup, but full disclaimer: I didn’t take this trade. Confirmation came 10 candles after the signal. The only reason to enter would’ve been that the MACD was steadily losing momentum, and we saw an explosive move to 1.6R. It then almost hit break-even again before pushing to 1.7R, and eventually back to break-even.

Question; why do/did you not take all the buy signals in consideration between 2 and 3?

I'm not exactly sure what you're referring to, but I don't see any signals between 2 and 3. If you're seeing something different on your end, please share the screenshots, and I'd be more than happy to take a look.

Wrapping up the day with another break-even on gold.
Frustrating, no doubt — but that’s part of the game.
We move forward. Tomorrow brings new setups and fresh opportunities.