Constructing stochastic timed exits and band-RSI reversals

Two contracts, one construction habit

The archive records two complete entry-exit constructions. One joins a custom stochastic to swing-confirmation and a fixed-bar-exit. The other joins a bollinger-band envelope to rsi-confirmation and an always-invested-reversal.

Editorial: TradersWeek reads each construction as a wiring choice. The parts are named, the order of checks is fixed, and the hold rule is written down before any bar is evaluated.

A custom stochastic with swing-confirmation and a timed exit

Percent-k locates the close inside the lookback high-low range and scales that location to 100. It is the close minus the lookback lowest low, divided by the high-low range, then scaled. When the slow factor is greater than 1, both the numerator and the range are averaged before the ratio is taken. Percent-d is a moving average of that percent-k and is the directional filter for swing entries.

The plotted stochastic used lengths of 5 for percent-k, 12 for percent-d, and 3 for percent-k smoothing. The tradable version used 7, 12, and 3, plus a 5-bar timed exit.

A long entry required percent-d to be higher than each of its prior two bars together with a swing low in percent-k. A short entry required the opposite percent-d sequence together with a swing high in percent-k. That pairing is swing-confirmation: percent-k must print a local low or high while percent-d is already rising or falling.

Both long and short positions were closed on the close of the bar whose count since entry equaled the ExitBars input. That is a fixed-bar-exit. It does not wait for an opposite oscillator signal.

An alternative stochastic construction stored K length, D length, and holding days as coefficients. It entered on a K-versus-D crossover and exited on the opposite crossover or when elapsed bars exceeded the holding-day-count.

A bollinger-band envelope with rsi-confirmation

A band-and-RSI rule set reversed short to long on the next open when the low was at or below the lower band and 20-period RSI was under 30. It reversed long to short when the high was at or above the upper band and RSI was over 70. The secondary check is rsi-confirmation: the relative-strength threshold must agree with the band touch before a reversal is taken.

That construction stayed fully invested with a position limit of one because the reversal conditions were not treated as discrete isolated events. The result is an always-invested-reversal: the book flips long to short or short to long instead of going flat.

A spreadsheet variant built bands from a 21-period average of the close plus or minus two standard deviations and paired them with a 20-period RSI using the same 30 and 70 confirmation thresholds. A bollinger-band here is a moving-average envelope of the close offset by a stated multiple of its lookback standard deviation.

A further band-and-RSI implementation used 20-period, two-standard-deviation bands on the close, the same RSI thresholds of 30 and 70, an entry cost of 5 and an exit cost of 10, and a position size equal to the full current account balance.

Every length and hold time is an input

Across both families the lengths, thresholds, ExitBars or holding-day-count, and stated costs appear as named inputs. The plotted and tradable stochastic lengths differ, the two band lookbacks differ, and the hold clock is either a fixed-bar-exit or a holding-day-count beside an opposite crossover.

Editorial: TradersWeek treats that habit as the usable lesson. The archive workflow is a template for writing a contract that can be tested, not a claim about present-day use.