top of page

Oversold Intraday on DAX

Updated: Jun 17

A Simple Mean-Reversion Strategy for the German Stock Market


The Idea

Traders often use the DAX 40 for intraday mean-reversion strategies. This one goes long on intraday weakness, defined by two classic indicators. It doesn't have any trend filter, but has an upper limit for volatility, to avoid catching knives that fall too aggressively. This strategy includes a stop loss of 0.5 %, which gives fewer winners than losers, but in return, it has a very high risk-to-reward ratio.



Setup for Backtest

Market: DAX

Contract: 1 € per point

Broker: IG

Testing environment: ProRealtime 12

Timeframe: 1 hour

Time zone: CET

No fees and commissions are included.


Result

Total gain: 18 211.7 €

Average gain: 8.4 €

Total trades: 2 162

Winners: 913

Losers: 1 248

Breakeven: 1

Max drawdown: 1 630.5 €

Risk/reward ratio: 1.75

Total time in the market: 42.9 %

Average time in the market: 16 hours, 26 minutes

CAGR (10 000 € in starting capital): 7.69 %


Backtest Results

Entry Conditions

  1. IBS is under 0.05

  2. RSI2 is less than 50

  3. 50 Period Bollinger Bandwidth is less than 0.06


Exit Conditions

  1. Low is above the last bar's close


Code

ProRealTime


FAQ

Q: Am I free to use this strategy however I want?

A: Sure! But we're happy if you refer to our website and keep the creator's name in the code.


Q: I'm using another platform, can you write the code in another language?

A: No, sorry. We might add code in more languages later to the website, but until then, we recommend you try ChatGPT or something similar to help you rewrite it.


Q: Why does my backtest look different when I run the code?

A: The strategy might give different backtest results for several reasons, like added spread or fees, the wrong time-zone settings, or that you're using another type of contract.


Q: Will I make money if I run this strategy live?

A: We don't know. We're not financial advisors, we're just traders sharing our ideas.

bottom of page