Mean Reversion Strategy in S&P 500 using RSI and IBS

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Below is a simple and easy trading strategy to implement in SPY or the S&P 500. In plain English the strategy reads like this:

1. IBS (internal bar strength) must be lower than 0.25 (using daily bars).

2. RSI (21) must be below 45.

3. If 1 and 2 are fulfilled, go long at the close.

4. Exit when close is higher than yesterday’s close.

Please click here to read about the mean reversion strategy in S&P 500.