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Mean reversionLong & short1h4h1d

Premium/Discount Zones strategy

Buy the discount extreme, fade the premium extreme, exit at equilibrium.

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Thesis

Buy the discount extreme, fade the premium extreme, exit at equilibrium.

Fits Mean reversion setups — works best when the underlying market behavior matches the thesis, and breaks down when it doesn't. Pair with the backtester's walk-forward mode before committing real capital.

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.

YAML rule-set

Paste this into the Strategy Designer's Text tab, or use the dashboard button above to load it as a template.

_template:
  title: Premium/Discount — fade the extremes
  category: mean_reversion
  skill: beginner
name: premium_discount_zones
weight: 1.0
long_only: false
indicators:
  pdz:
    kind: premium_discount_zones
    lookback: 200
entry:
  combine: OR
  rules:
    - combine: AND
      direction: long
      rules:
        - {lhs: {indicator: pdz, field: current_zone}, op: eq, rhs: {value: 1}}
    - combine: AND
      direction: short
      rules:
        - {lhs: {indicator: pdz, field: current_zone}, op: eq, rhs: {value: -1}}
exit:
  combine: OR
  rules:
    - {lhs: {indicator: pdz, field: current_zone}, op: eq, rhs: {value: 0}}
risk:
  trailing_stop_pct: 0.04
  cooldown_bars: 5

Indicators

  • pdzPremium/Discount Zones (lookback 200)

    Clean-room premium / equilibrium / discount zones over a 200-bar range. current_zone = +1 in the bottom 5 % (discount), -1 in the top 5 % (premium), 0 in the middle 5 % (equilibrium).

Entry conditions

The bot opens a position the bar after every condition below has fired.

  • Long when price is inside the discount zone (current_zone = +1).
  • Short when price is inside the premium zone (current_zone = -1).

Exit conditions

Any of the conditions below will close the position.

  • Position closes when price returns to equilibrium.
  • 4% trailing stop, 5-bar cooldown.

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.

Equity-curve character, not a return forecast. Backtests are not promises about live performance.

Try it on your own data

Open the template in the dashboard to backtest it on BTC, ETH, or any CCXT symbol — or copy the YAML into the Strategy Designer to edit it first.

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Past behavior on backtests is not a guarantee of future performance. Markets change; rule sets need re-validation. Trade at your own risk.