Mean Reversion Trading | What Is It And How Do You Trade It?

Originally published at: Mean Reversion Trading | What Is It And How Do You Trade It?

The article on Mean Reversion Trading is the opinion of Optimus Futures, LLC. Asset prices often tend to revert back to an established mean after an extreme move. Successful application of this principle in trading requires patience and skill. Continuous adaptation is critical when trying to fade markets. You know how rubberbands work. You pull it or stretch it and it snaps right back. Well, there’s a financial concept that plays out similarly. It doesn’t guarantee a snap-back in price; sometimes the model will just break and prices will run. But when it does work out, the rubberband makes for…