RSI Mean Reversion for US500 (S&P 500)

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

Why RSI Mean Reversion Works on US500

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 S&P 500 (US500) is the global benchmark equity index. Strong long-term uptrend with regime shifts; momentum and trend bots dominate, mean-reversion works in QE periods only.

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 US500 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")