Mean Reversion strategy/study

[METAL]

@MerryDay, I believe I read that you trade mean reversion. If I have this correct, do you use any indicators or strategies? If so, Would you mind posting them?

 

[MerryDay]

@MerryDay, I believe I read that you trade mean reversion. If I have this correct, do you use any indicators or strategies? If so, Would you mind posting them?

I use the VIP BuyTheDip to scan my corral for developing potential dippers. You can use whatever identifies extreme price moves for you. Some common ones are bands, channels, volatility, etc...

I then use the VIP Tape Reading Chart Setup to find entry and exits.

While the above chart setup uses VIP indicators. There are general forum indicators, which provide the overarching logic:

• Market Phases
• Volume Spread Analysis
• Tape Reader
• Spike Indicator
• Support & Resistance
• and Volume

The key to the success of the above indicators is that they are noncollinear, have no lag and are incorporated into:
the basic elements of a good strategy.

Note: Oscillators, Repainters, and MTF studies are contraindicated for entry/exit signals due to their false signals which generally occur during the reversion stage; only use these types of scripts for confirming signals.

 

[dmillz]

Z-Score is a great indicator for this

 

[MIc5th]

I use the VIP BuyTheDip to scan my corral for developing potential dippers. You can use whatever identifies extreme price moves for you. Some common ones are bands, channels, volatility, etc...

I've been looking into becoming a VIP member, just to purchase this Buy the Dip indicator, but i have one question...
what is the difference between Buy the Dip & RSI (MFI)?
Thanks in advance.

 

[MerryDay]

@dmillz @MIc5th

I use the VIP BuyTheDip to scan my corral for developing potential dippers. You can use whatever identifies extreme price moves for you. Some common ones are bands, channels, volatility, etc...

I wouldn't use an oscillator for my primary signals. Those triggers are not necessarily the extreme price moves if the stock is ranging or sideways.

Oscillators are one of the most profitable signals when trending, but rife with false signals when not.
Read more:
https://usethinkscript.com/threads/how-to-read-an-oscillator-in-thinkorswim.11497/#post-99858