064: Nick Radge – The Casino Edge, Mean Reversion Strategies, and How to Develop Robust Trading Systems
Chat With Traders
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How Do I Trade Mean Reverting?
In mean reverting, you're trading the price back towards the mean. What I'm looking to do is find points where you have a stock that is severely oversold or overstretched if you like. And at that point, the probabilities suggest it's going to snap back the other way. The ideal situation for a mean reversion system is a market moving sideways or slowly moving up. A market that moves fast on the upside doesn't allow me to actually get in and I will underperform. But a slow creep higher is probably the ideal situation or a sideways market would be ideal. For example, last year 2015, my US meanReversal system produced a return of about 14
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