Premium/Discount Zones strategyvsRSI mean reversion strategy
Premium/Discount Zones strategy: Buy the discount extreme, fade the premium extreme, exit at equilibrium. · RSI mean reversion strategy: Buy when the market is overextended below the mean, ride it back to fair value.
Premium/Discount Zones strategy
Buy the discount extreme, fade the premium extreme, exit at equilibrium.
RSI mean reversion strategy
Buy when the market is overextended below the mean, ride it back to fair value.
Indicators
- Premium/Discount Zones (lookback 200)
- RSI (period 14)
Timeframes
Bias
Long & short
Long only
Market fit
Range-bound
Range-bound
Entry rules
- Long when price is inside the discount zone (current_zone = +1).
- Short when price is inside the premium zone (current_zone = -1).
- 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
- Position closes when price returns to equilibrium.
- 4% trailing stop, 5-bar cooldown.
- Close the position when RSI(14) recovers above 70.
- Hard stop-loss at 3% below entry; take-profit at 5%.
Expected behavior
Range trader — fits balanced markets where extremes get bought / faded back to mid. Stacks losses in strong trends that camp at one extreme for many bars.
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
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 Premium/Discount Zones strategy
- You expect range-bound — the thesis is "Buy the discount extreme, fade the premium extreme, exit at equilibrium."
- You want a long & short bot on 1h–1d candles with a balanced rule-set.
- You're comfortable monitoring 1 indicator (Premium/Discount Zones (lookback 200)).
Buy the discount extreme, fade the premium extreme, exit at equilibrium.
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.
Premium/Discount Zones strategy
Buy the discount extreme, fade the premium extreme, exit at equilibrium.
RSI mean reversion strategy
Buy when the market is overextended below the mean, ride it back to fair value.
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