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Development ideas for mean reversion system

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Mean Reversion systems are quite consistently profitable in so called normal market. They take a big hit in the Jan '08 type of correction. They can be made to be highly profitable when leverage is used, but not easy to trade. The systems that I am trading (with CFDs) have very high W/L ratio but with very wide fixed stops can cause severe loss on the rare occasion when it is hit. Leverage needs to be controlled as it is quite easy to get carried away when the system is really firing.

These systems took a lot of punishment in the Jan '08 correction when the market fell for 12 consecutive sessions. My systems are very quite at the moment. The best way to trade these systems is in conjunction with other systems like short term trend following short system to offset the drawdowns of the MR system.

Cheers
 
If turned from long to short wouldnt you have had a tremendous run (when shorting is allowed) trading off the highs of retracements within the down move?
Pretty well the opposite to the long trading setups.
 
mean reversion systems are great if u like counter trend trading etc etc ---- the instrument you trade will determine the tack you take -- current market conditions are choppy - just shorten yr time frames --- M/R works well on FX ;)
 
Try Pair Trade Finder (pairtradefinder.com) for a great "mean-reversion" system. If you want to make money selling your system, then continue to develop your own. But if you're interesting in trading "mean reversion," this is a system that works, and the developer has a thread on this Board on which he posts his trades as he does them. His first 20 trades were 90%+ profitable.

Yours, Edward deVeres.
 
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