Mean Reversion strategies
Mean reversion strategies bet the other way: that a sharp move has gone too far and will snap back. They often win most of their trades with small gains, so the risk to watch is the occasional move that keeps going.
4
strategies in this family
4
animated replays
0
with published research
7
other families
- 3beginner
- 1intermediate
- Mean ReversionTested, mixedRSI(2) mean reversionIn a long-term uptrend, buy when a 2-period RSI shows a sharp short-term sell-off, and sell on the first bounce.Swing tradingBeginner
- Mean ReversionPopular, untestedBollinger Band mean reversionIn a sideways market, buy when price closes back inside after a close below the lower Bollinger Band, aiming for the middle band.Day trading, Swing tradingBeginner
- Mean ReversionPopular, untestedVWAP mean reversionWhen price stretches far from VWAP and stalls, trade the move back toward it.Day tradingIntermediate
- Mean ReversionPopular, untestedInternal bar strength (IBS)In a long-term uptrend, buy a day that closes near its low and sell on the next strong close.Swing tradingBeginner