Mean Reversion3m / 5m CandlesComplexity: Intermediate
Stochastic RSI Mean Reversion Scalper
A rapid intraday oscillator strategy that enters counter-trend pullbacks when Stochastic RSI reaches oversold (< 20) or overbought (> 80) extremes in the presence of a supporting 200 EMA trend filter.
Public & Generic Educational Strategy Notice: This strategy blueprint represents a publicly known mathematical formulation and standard technical analysis concept. Algo Software Innovations does NOT claim proprietary copyright, invention, or exclusive ownership over these formulas. You can adapt, customize, and deploy this logic to your private cloud VPS.
Mathematical Logic & Formula Formulation
Long = (Price > 200 EMA) and (StochRSI_K crosses above StochRSI_D below 20.0)
Deterministic Entry Rules
Long Entry (BUY)
- ✓Close is ABOVE 200 EMA (Bullish Macro Bias).
- ✓StochRSI %K line crosses ABOVE %D line below 20.0 (Oversold Bounce).
Short Entry (SELL)
- ✓Close is BELOW 200 EMA (Bearish Macro Bias).
- ✓StochRSI %K line crosses BELOW %D line above 80.0 (Overbought Dip).
Exit Criteria & Stop Loss Protection
Initial Stop Loss0.6% from Entry price or 1.0x ATR.
Target Profit1.2% quick scalp target.
Risk/Reward Expectancy1 : 2.0
Strategy Configuration Specs
Market Segment:Nifty Options & High-Beta Stocks
Candle Timeframe:3m / 5m Candles
Risk-to-Reward Ratio:1 : 2.0
Throttling Compliance:≤ 10 OPS Enforced
Required TA-Lib Indicators:
StochRSI (14, 14, 3, 3)EMA (200, Close)ATR (14)
Risk Management Controls
- •Enforces hard maximum 5 scalps per day with trailing loss limit.
Target Trader Profile:Fast-paced algorithmic scalping for options and cash equities.