Bullish Dip-Buy Strategy
Strategy Name: Bounce Entry
Strategy Description:
Bounce Entry is a counter-trend long strategy designed to capture high-probability mean reversion moves following periods of oversold pressure and volatility expansion. It combines a price-based volatility signal with a momentum oversold trigger to enter long positions when assets are likely to rebound from short-term extremes. This strategy is ideal for traders seeking disciplined entries into temporary pullbacks within broader market noise.
Core Setup:
Mean Reversion Trigger:
Enters long only when the price crosses above the lower Bollinger Band (20, 2) on the 3-minute bar chart, indicating a shift from volatility-driven selling pressure toward stabilization or reversal.
Momentum Oversold Filter:
RSI(14) must be below 30 on the same 3-minute bar chart, confirming the asset is in a statistically oversold condition.
Entry Timing Logic:
The crossover must occur during a live bar or be confirmed on bar close, minimizing false signals from mere proximity to the band.
Profit Target & Risk Control:
Take Profit: +0.75%
Stop Loss: -0.75%
A 1:1 reward-to-risk ratio ensures steady returns when combined with a solid signal-to-noise entry framework.
Ideal For:
Traders who seek tactical long entries during volatile sell-offs
Mean reversion systems that prefer oversold signals backed by volatility metrics
Traders wanting to automate entry into short-term reversal setups with balanced risk management
Bounce Entry provides a clean, repeatable playbook for capturing short bursts of bullish momentum during price dislocations, with tight, symmetrical risk parameters that promote consistency and minimize emotional decision-making.
Alternative Exit Criteria:
Strategy Name: Bounce Entry Smart Exit
Exit the position early if either of the following conditions is met before the fixed profit or stop levels:
RSI(14) rises above 50, signaling the bounce may be losing steam. Price crosses above the middle Bollinger Band (20 SMA), suggesting a return to the mean has occurred.
This dynamic exit allows the strategy to lock in profits earlier when the market reverts more quickly than expected, reducing exposure to snap-back volatility or trend continuation against the position.
Ideal For:
Traders who seek tactical long entries during volatile sell-offs
Mean reversion systems that prefer oversold signals backed by volatility metrics
Traders wanting to automate entry into short-term reversal setups with balanced risk management.
Next steps:
Try this strategy on a different asset or timeframe -
Navigate to the “Create” menu on the homepage, choose your preferred asset and timeframe, then choose “Copy” to duplicate the strategy.
From there, backtest and deploy whenever you're ready.
Reach out to the Level2 team with any questions or if you need tech support
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