Mean Reversion

Mean reversion works on the idea that prices tend to return to their average over time. When the price moves far away from its average, this creates a trading opportunity. The further the price strays, the larger the position taken, expecting the price to eventually bounce back toward the average.

Settings

Timeframe: The period used to calculate the average price. A shorter timeframe reacts quickly to recent price changes but may trigger more false signals. A longer timeframe is more stable but slower to respond to market shifts.

Deviation Range (Min/Max): Defines how far the price must move from its average before trades are triggered. The minimum is the smallest deviation needed to start trading; the maximum is the largest deviation that will be traded. Prices outside this range won't trigger new positions.

Position Size Range: The percentage of your capital allocated to each trade, scaled based on how far the price has deviated. Small deviations use the lower end of your range; large deviations use the upper end. This means bigger bets when the opportunity appears stronger.

Note: Positions exit when the price returns to the average. However, if the average moves significantly in the direction of your position (beyond your deviation range), trades may exit at a loss as the new average is recalculated.