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SMA breakout (Donchian-style) strategyvsRSI mean reversion strategy

SMA breakout (Donchian-style) strategy: Buy a fresh push above the 20-bar mean and trail the winner until it folds. · RSI mean reversion strategy: Buy when the market is overextended below the mean, ride it back to fair value.

BreakoutLong only

SMA breakout (Donchian-style) strategy

Buy a fresh push above the 20-bar mean and trail the winner until it folds.

Mean reversionLong only

RSI mean reversion strategy

Buy when the market is overextended below the mean, ride it back to fair value.

Indicators

  • SMA (period 20)
  • RSI (period 14)

Timeframes

1h4h1d
15m1h4h

Bias

Long only

Long only

Market fit

Volatility expansion

Range-bound

Entry rules

  • Enter long when close crosses above the 20-bar SMA.
  • 4-bar cooldown after exit reduces back-to-back whipsaws.
  • Enter long when RSI(14) prints below 30 — the textbook oversold threshold.
  • Only one position at a time; the cooldown blocks immediate re-entry after an exit.

Exit rules

  • Close on a cross back below the SMA.
  • Trailing 5% stop catches deeper retracements before the SMA flips.
  • Close the position when RSI(14) recovers above 70.
  • Hard stop-loss at 3% below entry; take-profit at 5%.

Expected behavior

Trendy growth in directional regimes punctuated by ugly chop when price oscillates around the SMA. Best paired with a higher-timeframe trend filter to skip the chop.

Choppy zig-zag equity curve with frequent small wins and the occasional outlier loss when a sharp downtrend leaves RSI pinned in the oversold zone. Fits range-bound chop; struggles in strong directional regimes.

Complexity

1 ind · 2 entry · 2 exitBalanced
1 ind · 2 entry · 2 exitBalanced

Which one is right for you?

Derived from the bias, timeframe and indicator profile of each strategy — not a back-test forecast.

When to pick SMA breakout (Donchian-style) strategy

  • You expect volatility expansion — the thesis is "Buy a fresh push above the 20-bar mean and trail the winner until it folds."
  • You want a long-only bot on 1h–1d candles with a balanced rule-set.
  • You're comfortable monitoring 1 indicator (SMA (period 20)).

Buy a fresh push above the 20-bar mean and trail the winner until it folds.

When to pick RSI mean reversion strategy

  • You expect range-bound — the thesis is "Buy when the market is overextended below the mean, ride it back to fair value."
  • You want a long-only bot on 15m–4h candles with a balanced rule-set.
  • You're comfortable monitoring 1 indicator (RSI (period 14)).

Buy when the market is overextended below the mean, ride it back to fair value.

SMA breakout (Donchian-style) strategy

Buy a fresh push above the 20-bar mean and trail the winner until it folds.

Try SMA breakout (Donchian-style) strategy in dashboard →Read full breakdown →

RSI mean reversion strategy

Buy when the market is overextended below the mean, ride it back to fair value.

Try RSI mean reversion strategy in dashboard →Read full breakdown →

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