VAR is the max you can lose at any given time. You use a MAX value instead of an average/median and assume it's going to happen. It's important to keep your sizing small and adjust it as you add to your position.

A Simple Mean Reversion Strategy

Thanks for dropping in PipMeUp! Have enjoyed a lot of your work around the forum in the past. That is correct, the "safer", defined as a higher probability win rate, the less meat on the bone there is to capture. This is built into anything that has ...

A Simple Mean Reversion Strategy

EUR/GBP setting up nicely to start building a long position.

A Simple Mean Reversion Strategy

You could use this signal but there will be very few entries overall. Also, the goal isn't to have "sniper" entries for scalps. It's to manage risk and be paid for it over time through a large number of occurrences.

A Simple Mean Reversion Strategy

Yes, I believe so, whenever you "build" your position, you are adding risk and moving your entry further away from fair value.

A Simple Mean Reversion Strategy

thanks for pointing this out! This was a typo, was probably thinking about being short so we would be cost averaging to raise your average entry. you never add to a position when it would move your average entry closer to fair value.

A Simple Mean Reversion Strategy

I did explain it, but may be easier to show it. image I said: "This is why you typically don’t want to be adding until there is basically no potential profit for your first or average entry price." I have marked the same entries but have added a ...

A Simple Mean Reversion Strategy

yes, I pretty much explained it above. The pip distance between those 3 entries is all very small. Theta would eat up that distance between each candle pretty quickly. Additionally. If you add there it will be more capital intensive to average down ...

A Simple Mean Reversion Strategy

please re-read 2nd post in thread. Fair value is ma. Spread is distance between current price and/or entry price to fair value.

A Simple Mean Reversion Strategy

Yeah, it will probably be a pretty big change for a lot of people who try it out. It's like that by design though. We aren't trying to "snipe" entries, but instead are playing a larger game and letting CLT do the work for us. This is also why it's ...

A Simple Mean Reversion Strategy

This is exactly why you need to stay small. Additionally, is why you don't want to take every entry signal. You need to weigh the risk. The 2nd and 3rd entry signals mark, provide almost no reward to taking on the access risk... If you were using a ...

A Simple Mean Reversion Strategy

As long as the re-painting is clearly acknowledged and accounted for, I like the seasoning!

A Simple Mean Reversion Strategy

It's a good entry method for returns you may want to add to but again, the size of the spread and the goal of going for a very high hit rate can be concerning. Mainly because we don't want to assume any one entry will be profitable, as this will ...

A Simple Mean Reversion Strategy

I like how you think! Lots of stuff similar to this will be coming down the pipe soon! Wish there was more time in a day haha

A Simple Mean Reversion Strategy

ZigZag repaints so it will look super good after the fact but using it in the present can be dangerous.

A Simple Mean Reversion Strategy

For 99% of people, it will work on any account size depending on your broker. Smaller accounts will be harder depending on your broker because you will probably be forced to take on more risk than you should. Oanda is the only broker I know where ...

A Simple Mean Reversion Strategy

Out of this position now. Starting to build some in AUD/NZD, GBP/NZD, EUR/NZD, and USD/CAD

A Simple Mean Reversion Strategy

You will want to read this post: url I'll be introducing some additional terms soon as we keep building on the initial concepts.

A Simple Mean Reversion Strategy

This is a very interesting way to enter indeed. I think the biggest issue is it's sort of a single-entry kind of thing. It probably works, but the biggest issue is, the spread is very small on entries, so your theta risk is higher. You winrate is ...

A Simple Mean Reversion Strategy

Overall, not much changed last night. Had a pretty good run toward fair value but has since reversed. Theta has eaten roughly 10 or so pips of our potential profit but we still have a good amount of meat on the bone. Looks like the price will run ...

A Simple Mean Reversion Strategy