RSI mean reversion and stochastic oversold bounce return within 4 basis points of each other
Two oversold bounce strategies land within four hundredths of a percent of each other on average return. Everything that usually explains a return, win rate, payoff ratio, trade count and drawdown, is different between them. The same number arrived by two different routes.
RSI mean reversion returned an average of 0.50 percent per ticker across the 214 completed runs. Stochastic oversold bounce, tested on the same 220 US large caps over the same ten years, returned 0.46 percent. Four hundredths of a percent apart, on the same universe, the same window, and two strategies built around the same basic idea: buy when an oscillator says a stock is oversold.
That is where the resemblance ends. RSI mean reversion's win rate is 41.34 percent. Stochastic oversold bounce's is 47.30 percent, almost six points higher. RSI mean reversion's aggregate risk to reward ratio, gross profit divided by gross loss across every trade, is 1.1904. Stochastic oversold bounce's is 1.0409, close enough to the 1.0 breakeven line to sit among the lowest ratios published on this site. RSI mean reversion generated 917 trades across its 214 completed tickers, about 4.3 per ticker over the decade. Stochastic oversold bounce generated 4,394 trades, about 20.5 per ticker, nearly five times as often. Two strategies chasing the same setup produced almost the same headline number by two routes that do not overlap on a single other figure.
Two ways to arrive at the same place
RSI mean reversion wins less often and gets paid more when it does. Stochastic oversold bounce wins more often and gets paid less. Tenachine's guide on reading a win rate makes the general case that win rate on its own says nothing without the payoff ratio next to it, using four strategies with widely different returns. This pair is a sharper version of the same lesson: here the two payoff structures roughly offset each other, landing on almost the same average return instead of pulling it apart. A 41.34 percent win rate at a 1.1904 payoff ratio and a 47.30 percent win rate at a 1.0409 payoff ratio are two different bets that happened to cost about the same over this particular decade.
The number that does not match
Trade frequency is the more striking gap, and it does not show up in the return at all. Tenachine's guide comparing pullback to the 20-day average against volume surge breakout found a pair of strategies with nearly matched win rate and risk to reward where trade frequency was the one variable moving, and it scaled both return and drawdown. This pair inverts that setup. Stochastic oversold bounce trades about 4.8 times as often as RSI mean reversion, close to the same multiple, but the return barely moves while the drawdown does: negative 5.48 percent against negative 2.68 percent, more than double. Tenachine's guide on inside bar breakout already showed that trade count alone predicts nothing about a strategy's result. These two pairs together show it more precisely: frequency can move a result by a lot in one comparison and barely touch it in another, depending on what the win rate and payoff ratio behind it are doing at the same time.
Coverage is not the explanation for any of this either. Both studies failed on exactly 6 of the 220 tickers, a 2.7 percent failure rate each, the same low rate most studies on this site show. Whatever keeps these two returns four basis points apart while every other figure diverges, it is not sample size.
Neither strategy is a recommendation, and 0.50 percent and 0.46 percent are both modest results over a full decade, closer to noise than to an edge worth trading on their own. What the pairing is useful for is narrower: a reminder that a matching headline number is not evidence that two strategies work the same way, and a trader choosing between them on return alone would miss that one trades five times as often and draws down twice as deep for almost nothing extra. Past performance does not predict future results, and neither oscillator's decade is a guarantee about its next one.