Overview: A Reversal Strategy for Trading on the Daily TimeframeState Street SPDR S&P 500 ETFBATS:SPYflukefluke_🍀Overview Hi all, I recently completed a Pine Script strategy designed for trading on the daily timeframe. I’m not a discretionary technical analyst, so I rely on predefined setups. I turn the rules into a strategy to make the process systematic and repeatable. The strategy includes several parameters, which are now finalized. The rules will remain unchanged unless an adjustment is genuinely necessary. Because the strategy was completed recently, it has already opened positions in several tickers. For those initial posts, the trade will be documented retrospectively and will be followed until the strategy exits or a discretionary exit is executed according to predefined rules. For future entries, a separate idea will be published when the strategy opens a position, following it through to the exit. Let's go through the strategy and use SPY as an example. 🍀Assumptions This is a long-only strategy built on the assumption that the underlying instruments will appreciate over time. It aims to capitalize on price fluctuations by establishing long positions when a stock trades at a discount. If this growth assumption fails to hold, the strategy is unlikely to perform well. Consequently, the current focus is on instruments like SPY and Nasdaq-100 stocks, with potential expansion to other assets in the future. 🍀Strategy Tickers: SPY, Nasdaq-100 stocks Date: When the setup triggers Timeframe: Daily Direction: Long Strategy: Reversal Strategy Strategy Overview: Overview: A Reversal Strategy for Trading on the Daily Timeframe Strategy Chart: Please refer to the 2nd screenshot Indicators RSI Signals: This is built on top of TradingView's original RSI indicator. It preserves the original RSI calculation and visualization while adding customizable overbought/oversold exit signals directly on the main price chart. NATR Oscillator: The NATR Oscillator converts Normalized Average True Range into a rolling 0–100 oscillator. NATR is calculated as ATR divided by the current closing price and expressed as a percentage. The indicator then compares the current NATR with the highest and lowest NATR readings over the selected lookback period. Signals Main signal: RSI Signals Long setup: RSI crosses above 30 Short setup: RSI crosses below 70 Confirmation signal: NATR Oscillator NATR Oscillator >= 80 Signal Scoring Main signal score: 0.5 Confirmation signal score: 0.5 Setup score = Main signal score + Confirmation signal score Entry threshold: 1.0 Risk Management Reward-to-risk ratio: 4:1 Entry: The close of the candle that triggers the setup Stop distance: approximately 4x daily ATR Target distance: approximately 16x daily ATR Order Management: Bracket order Limit entry Market stop Limit target Baseline Assume the worst has already happened: the stop loss has been reached. Alerts The strategy can be configured to fire an alert whenever a setup occurs, long or short, regardless of whether it is currently holding a position. Rules A setup occurs when both signals appear at the same time. The strategy enters when the setup score is greater than or equal to the entry threshold. The strategy must not currently be in a position. One entry, one exit. No scaling in or out. Unfilled entry: If the entry is not filled and price reaches the target first, the bracket order is cancelled. The strategy treats this as a missed setup and waits for the next one. Optional discretionary exit: If an opposite signal or short setup appears and the reward is at least 2R, the position can be exited. 🍀Visualization Please refer to the 2nd screenshot Pane 1: Price Chart Bracket order visualization (a simplified version compared with TradingView's long/short position drawing tools) Green zone: profit zone Red zone: loss zone Middle gray line: entry price Labels Entry label: entry price Stop label: stop price and stop distance Target label: target price and target distance Shapes Green triangles: Long setups Red triangles: Short setups Pane 2: Volume Z-Score It compares the current volume with its recent average and standard deviation to identify unusually extra high, high, normal, or below-normal volume. Shown for completeness and does not affect the strategy. Pane 3: RSI Signals Pane 4: NATR Oscillator Pane 5: Reversal Strategy Static lines Green line: long setup threshold, currently 1.0 Red line: short setup threshold, currently 1.0 Dynamic lines Green line: long setup score for that candle Red line: short setup score for that candle Peaks Green peak: a long setup occurs when it touches or crosses the long threshold Red peak: a short setup occurs when it touches or crosses the short threshold Table Ticker Bias: long setup score > short setup score is Long bias; reverse is Short bias; otherwise Tie L/S scores (thres): long/short scores and thresholds on the latest candle Stop/target dist: stop and target distances if entering a position, currently 4x daily ATR for the stop and 16x daily ATR for the target 🍀Example: SPY This setup occurred before the strategy was developed. The trade is documented retrospectively and will be followed until the strategy exits or a discretionary exit is executed according to predefined rules. ☘️Process Ticker: SPY Date: 09/04/2025 Timeframe: Daily Direction: Long Strategy: Reversal Strategy Strategy Overview: Overview: A Reversal Strategy for Trading on the Daily Timeframe Strategy Chart: Please refer to the 2nd screenshot Signals Main signal: RSI Signals crossed above 30, indicating an exit from the oversold zone. This contributed a score of 0.5 Confirmation signal: NATR Oscillator reached 100, exceeding the required threshold of 80. This contributed a score of 0.5 Signal Scoring Main signal score = 0.5 Confirmation signal score = 0.5 Long setup score = main signal score + confirmation signal score = 0.5 + 0.5 = 1.0 Long score threshold: 1.0 The long setup score met the required threshold. The strategy therefore placed a long bracket order. Risk Management Reward-to-risk ratio: 4:1 Entry: 548.62 (the close of the setup candle) Stop distance: 64.25 (approximately 4x daily ATR) Target distance: 257.01 (approximately 16x daily ATR) Order Management: Bracket order Limit entry: 548.62 Market stop: 484.37 Limit target: 805.63 Baseline Assume the worst has already happened: the stop loss has been reached. ☘️Outcome Trade Execution 09/04/2025: The daily candle closed, triggering the strategy to place a long bracket order. 10/04/2025: Price reached the trigger level, and the long entry filled. Trade Status Trading: active P.S. I’m currently applying this strategy to the Nasdaq-100. Let me know which stock you’d like me to look at next. Stay lucky!🍀