The Mean-Reversion Technical Indicator

How Much is too Much When it Comes to Reversals?

We often hear about mean-reversion. The real question is how to objectively quantify the “too much” part of it. Many advanced and complex techniques have been suggested, with many still working nowadays. We can try to create a simple technical indicator which we’ll call the mean-reversion indicator to detect expected reversals and to quantify when has t…