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🔐 Safe testing? Run with RCS Client — zero-config isolated sandbox. 📊 Full quant stack? Explore all strategies at rcs.buzz.

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📉 Simple Mean Reversion

A minimal, self-contained Freqtrade strategy that captures mean reversion using Bollinger Bands and RSI.

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🎯 Strategy at a Glance

 ENTRY:  Price < Lower Bollinger Band (20, 2σ)  ⋂  RSI(14) < 35

  EXIT:  ROI table (5% → 3% → 1% → −1%)   OR   Stop Loss (−15%)

When price falls 2 standard deviations below its 20-period mean and RSI confirms oversold, we enter long. Price tends to revert — that's the edge.

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✨ Why This Strategy?

🧩 2 indicators	Bollinger Bands + RSI. No black magic.
📦 Single file	Zero external dependencies beyond Freqtrade & Pandas.
📈 Long-only	No shorting. Simpler psychology, simpler execution.
🛡️ 15% hard stop	Prevents catastrophic slides in trend days.
⚙️ No optimization	Uses Bollinger's & Wilder's original parameters (20/14).

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🚀 Quick Start

# 1. Clone
git clone https://github.com/zodboy/freqtrade-simple-mean-reversion.git
cd freqtrade-simple-mean-reversion

# 2. Install Freqtrade
pip install freqtrade

# 3. Configure
cp config.example.json config.json
# → Edit config.json: set exchange, pairs, stake amount

# 4. Dry-run (paper trade)
freqtrade trade --config config.json --strategy SimpleMeanReversion

# 5. Backtest
freqtrade backtesting --config config.json --strategy SimpleMeanReversion --timerange 20240101-

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📊 Indicator Breakdown

Bollinger Bands (20, 2σ)

Band	Formula	Meaning
Mid	20-period SMA	Local "fair value"
Lower	Mid − 2σ	∼2.5th percentile — cheap
Upper	Mid + 2σ	∼97.5th percentile — expensive

95% of price action lives inside the bands. A close below the lower band is statistically rare and often mean-reverts.

RSI (14, Wilder)

Zone	RSI	Action
Oversold	< 30	Potential bounce
Neutral	30–70	No edge
Overbought	> 70	Potential pullback

We enter at < 35 (not 30) — slightly early, to catch bounces before the crowd.

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💰 Recommended Setup

Setting	Value	Why
Pairs	BTC, ETH, SOL, DOGE, XRP	Liquid, volatile enough
Stake/trade	5–10% of wallet	Diversify across max 3 trades
Timeframe	1h	Sweet spot: enough signal, not too noisy
Leverage	1×	This is a spot strategy

// In config.json:
{
    "max_open_trades": 3,
    "tradable_balance_ratio": 0.99,
    "stake_amount": "unlimited"
}

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⚠️ Limitations

• Trending markets: Price can "walk the band" in strong downtrends. The −15% stoploss is your safety net.
• No exit signal: Exits rely entirely on ROI + stoploss. Trades may sit for hours or days.
• 1h only: Tested on hourly candles. 1m/5m has too much noise for this logic.
• Crypto-focused: Generalizes to any liquid market, but backtest your own data.

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🗺️ Roadmap

• Add volume filter (avoid low-liquidity entries)
• Add trailing stop after +3%
• Daily trend filter (don't fight the trend)
• Multi-timeframe confirmation

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📄 License

MIT — do whatever you want. A star ⭐ is appreciated if you find it useful.

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Made with ☕ by zodboy · zodboy1024@gmail.com