Conversation

Capitaine Bleuten
@CBleuten
Replying to
@agjSecond
and
@SBF_FTX
Mean reversion means the opposite of momentum. After a continuated move in a direction, the price is far from the mean of a number of previous prices, and eventually a reversal move is needed so the value is more in line with previous values
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fed 🦜
@GainZfed
Replying to
@SBF_FTX
mean reversion strategy allows traders to determine whether big moves will partly reverse or not, momentum trading assumes big moves will continue in the same direction
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Jon Slemp
@Jon_Slemp
Replying to
@SBF_FTX
This question reminds me of the interplay between Conventional Wisdom vs Liberalism outlined by JG in The Affluent Society. If momentum were stronger than mean reversion, there would be no mean.
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