Reverse Strategy
This EA implements a mean reversion strategy that trades against the prevailing trend when price reaches extreme levels. It identifies overbought and oversold conditions using technical indicators and opens counter-trend positions expecting a reversal. The strategy includes built-in stop loss and take profit levels for each trade.
Open the interactive view (equity curve, symbol switch)Key facts
Backtest results (H1, about 1 year)
| Symbol | P&L | Annual | Max DD | Trades | Win rate | Sharpe | Recovery | Losing streak | Per trade | Status |
|---|---|---|---|---|---|---|---|---|---|---|
| EURUSD | -0.27% | -0.24% | 3.79% | 110 | 48.60% | — | — | — | — | Same as other EAs |
| GBPUSD | +6.63% | +5.74% | 3.89% | 108 | 51.90% | — | — | — | — | Same as other EAs |
| USDJPY | +2.10% | +1.82% | 4.75% | 99 | 49.50% | — | — | — | — | Same as other EAs |
| XAUUSD | +1.98% | +1.63% | 52.23% | 105 | 50.00% | — | — | — | — | Same as other EAs |
On every market this backtest is identical to EA-16787, EA-16877, EA-17274, EA-17489, EA-17741, EA-19089, EA-20222, EA-20527 and others. The automatic conversion almost certainly lost what makes this EA different (a custom indicator, a filter or the money management), so these results are not ranked or counted.
Converted from MQL5 to Python and run with the same rules for every EA. Positions use MT5 lot sizes (100,000 units per FX lot, 100 oz per gold lot) with 1:100 leverage, one order at a time, and a stop-out below 10% of the starting balance. Sharpe is computed from the equity curve. Results marked as unreliable are shown for completeness only.
Blow-up risk: No blow-up pattern found
None of the usual blow-up patterns were found in the code, and the account was not stopped out in our backtests. That is not a guarantee: any EA can lose money.
High: stopped out in our backtest, or martingale/grid sizing without a stop loss. Elevated: martingale or grid sizing with a stop loss, or several positions at once without a stop loss. What the label means and what we found →
Strategy analysis
The core strategy concept is mean reversion, trading against price extremes expecting a return to the mean. Entry conditions are triggered when technical indicators reach overbought or oversold thresholds, signaling potential reversal points. Exit conditions include fixed stop loss and take profit levels, and may also close positions when indicators return to neutral zones. Position sizing uses either fixed lot sizes or a percentage-based calculation relative to account equity. Money management incorporates a maximum risk per trade ratio and may include limits on total open positions. While the logic is straightforward, mean reversion strategies face the risk of consecutive losses during strong trending markets.
Strengths
- Clear and understandable strategy logic, suitable for beginners learning mean reversion concepts
- Explicit stop loss and take profit provide basic risk control safeguards
- Performs well in ranging markets, capturing opportunities when price reverts to the mean
Weaknesses
- May suffer consecutive losses during strong trending markets, an inherent flaw of mean reversion strategies
- Lacks a trend filter to effectively distinguish between ranging and trending market conditions
- Position sizing may be inflexible, as fixed lot sizing does not account for account equity fluctuations
Possible improvements
- Add a trend filter (such as MA direction or ADX indicator) to pause trading or reduce position size during trending markets
- Introduce dynamic position sizing that adjusts lot size based on account balance and market volatility
Risk assessment
Overall risk: Medium
- Mean reversion can lead to consecutive stop losses during strong trends, causing significant drawdowns
- Lack of multi-timeframe confirmation may produce frequent false signals from a single indicator
Evaluation scores
Parameters
| Parameter | Default | Description |
|---|---|---|
LotSize | 0.1 | Fixed lot size per trade |
StopLoss | 500 | Stop loss in points |
TakeProfit | 1000 | Take profit in points |
RSI_Period | 14 | RSI indicator period |
RSI_Overbought | 70 | RSI overbought threshold |
RSI_Oversold | 30 | RSI oversold threshold |
MagicNumber | 12345 | EA magic number for distinguishing orders |
Similar Mean Reversion EAs
Backtests are historical simulations and do not guarantee future results. Not financial advice.