Indeed. Generally speaking I would avoid entering unless price had move maybe a couple of standard deviations away. That said your observation regarding the pro-trend based move having a better profit potential is exactly the reason I am interested in the question; Is the principle of mean...
OK, I'll try and be a bit more specific instead of you guys trying to guess what is going on in my pea-head.
Take a look at the attachment.
On the left, we have a little bit of basic maths stuff which plots the best estimate of what is happening with the trend. This was $ES_F yesterday around...
It does basically distill down to taking counter-trend trades but what I have managed to do is de-trend trends even when they are not really going in a straight line (i.e. parabolic - usually as the trend fades and starts to lose momentum).
No pairs. Single instrument.
Folks,
I have been messing around during the quiet periods with a mean reverting strategy which is showing some interesting results.
The question I have is whether you take trades in both directions, particularly if there is good evidence of a trend on a higher timeframe.
Answers on a...
Kinell bud. Doin' a stretch like that should help you get your nut in the game and avoid p1ssin' around trading the smalls.
I'm off down the gym to watch my mate break another power lifting record. After a glass of Merlot of course.
BTW, I predicted in hindsight just where spooz would land on...