---
title: "AUDUSD Linear Regression Range Reversion Strategy"
description: "Required membership : Free  (Activate the plan here) Type : Breakout TimeFrame : H1 Download strategy file Profit factor  1.38 Instrument:  Forex Supported platforms : MetaTrader 4, MetaTrader 5, Stra..."
url: https://quantmonitor.net/audusd-linear-regression-range-reversion-h1/
date: 2026-01-10
modified: 2026-01-11
author: "Lukas"
image: https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.57.52-scaled.webp
categories: ["Free & premium trading strategies"]
type: post
lang: en
---

# AUDUSD Linear Regression Range Reversion Strategy

**Required membership**: Free [(Activate the plan here)](https://quantmonitor.net/sign-in-for-free-resources/)

**Type**: Breakout

**TimeFrame**: H1

Please register to download the strategy

**Profit factor** 1.38

**Instrument:** Forex

**Supported platforms**: MetaTrader 4, MetaTrader 5, StrategyQuant

[![AUDUSD Linear Regression Range Reversion Strategy](https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.57.52-2000x877.webp)](https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.57.52-scaled.webp)

[![AUDUSD Linear Regression Range Reversion Strategy](https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.58.08.webp)](https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.58.08.webp)

[![AUDUSD Linear Regression Range Reversion Strategy](https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.58.26-2000x926.webp)](https://quantmonitor.net/wp-content/uploads/2026/01/Snimek-obrazovky-2026-01-10-v-10.58.26.webp)

## **Strategy description**

This is the **first strategy** in a new series of systems generated with a strict focus on the **most recent decade of market behavior**. Built for **AUDUSD on H1**, it is designed to exploit **current volatility conditions** and **recurrent market patterns** that repeatedly appear in this pair.

After the initial build, the strategy went through **multiple out-of-sample (OOS) validations** and a dedicated **TRUE OOS**test to reduce overfitting risk and confirm that the underlying logic remains stable beyond the development sample.

---

## **Core logic**

The strategy looks for **price extremes** using **Bollinger Bands**:

- **Long setup:** the **Open two bars ago** is below the **Lower Bollinger Band** (BB period 50, deviation 2.4, PRICE_CLOSE).
- **Short setup:** the **Open two bars ago** is above the **Upper Bollinger Band** (same settings).

Instead of entering at market, it places **pending STOP orders** at dynamic levels derived from:

- **Linear Regression (period 17)** as a directional/mean reference,
- plus/minus a **range component** (SmallestRange/BiggestRange period 68) to adapt entry distance to recent market structure.

### **Entries**

- **LONG:** place a buy stop atLinReg[1] + SmallestRange[2]
- **SHORT:** place a sell stop atLinReg[1] – BiggestRange[2]

Pending orders remain valid for **36 bars**. Duplicate trades are disabled, while replacing existing pending orders is allowed.

---

## **Risk management & exits**

- **Stop-loss:** 1.9 × ATR(35) (volatility-based)
- **Profit target:** 5.6%
- **Time-based exit:** close the position after **14 bars** (stabilizes holding time and reduces tail risk)
- **Friday risk control:** **forced exit on Friday at 19:00** to reduce weekend gap exposure

---

## **Who this strategy is for**

If you want an AUDUSD system that:

- **adapts to volatility** (ATR-based SL + range-informed entries),
- combines **extremes (Bollinger Bands)** with **structure (linear regression)**,
- and enforces **disciplined exits** (time-based + Friday cutoff),

this is a clean, pattern-driven approach aimed at capturing repeatable behavior in the **current volatility regime**.

---

## **Key settings (quick recap)**

- **Symbol / TF:** AUDUSD / H1
- **Backtest window:** 2015-01-02 to 2025-08-22
- **Bollinger Bands:** period 50, deviation 2.4
- **Linear Regression:** 17
- **Range period:** 68
- **ATR for SL:** 35
- **SL:** 1.9×ATR(35)
- **PT:** 5.6%
- **Exit:** after 14 bars, Friday 19:00

https://youtu.be/re1fxkCPddA