Engineering Alpha

Engineering Alpha

Designing a Powerful Mean Reversion Trading Strategy

A Double Trouble Trading Strategy For Powerful Market Reversals

Sofien Kaabar, CFA's avatar
Sofien Kaabar, CFA
Feb 29, 2024
∙ Paid

Mean reversion is a concept in technical analysis that suggests that prices tend to revert to their historical average over time. In other words, when a price deviates significantly from its average value, there’s a tendency for it to eventually move back towards that average.

For example, let’s say a stock’s price typically fluctuates around $50, but du…

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