65452346's Blog
:
October 2025
Mean reversion trades – trying not to get trapped
POSTED ON
10/01/25
At first I was treating every sharp move like a rubber band that must snap back, but markets can stay overextended longer than you expect. What changed things for me was building actual rules for when to enter, instead of just guessing. For example, I now use Bollinger Bands and RSI together to check if price is really stretched before taking a mean reversion trade. I also make sure there’s no strong trend in play, because trying to fade momentum is usually suicide. Reading through https://forextester.com/blog/mean-reversion-trading/
gave me some structure for this approach. It explained that mean reversion works best in ranging markets or when volatility pushes price too far from its average. That clicked for me, because I had been trying it in trending conditions, which almost always ended badly. Another thing I added was scaling into trades carefully instead of going all-in at one level. That way if the market overshoots more, I still have room to add without blowing up. I also backtest different pairs because not all instruments behave the same—some revert quickly, others trend relentlessly. Honestly, the biggest improvement came from defining strict exits. I used to hold forever waiting for the “perfect” mean reversion, but now I set clear profit targets around the moving average and get out. It’s not glamorous, but it’s consistent.
