RSI Mean Reversion for US30 (Dow Jones)

Buy oversold, sell overbought — the simplest counter-trend strategy that still works in range-bound markets.

Why RSI Mean Reversion Works on US30

RSI mean reversion buys when RSI(14) drops below 30 and exits above 70. It fails badly in strong trends — a stock can stay overbought for weeks — so it only earns its keep on range-bound symbols or with an ADX/MA regime filter. Tighter thresholds (25/75) reduce trade count but improve win rate.

The Dow (US30) is composed of 30 large-cap blue chips. Trends cleanly through earnings season, gaps on overnight news. Trend and breakout strategies are the natural fit.

Equity indices reflect aggregate corporate earnings, sentiment, and Fed policy. They trend more cleanly than individual stocks and gap less than commodities.

Pine Script Source

Copy this into PineForge — backtest on US30 or any supported symbol, then deploy as a live bot.

//@version=5
strategy("RSI Mean Reversion", overlay=true)

rsi_len = input.int(14, "RSI Length")
oversold = input.int(30, "Oversold Level")
overbought = input.int(70, "Overbought Level")

rsi_val = ta.rsi(close, rsi_len)

if rsi_val < oversold
    strategy.entry("Long", strategy.long)

if rsi_val > overbought
    strategy.close("Long")