@backtestwizard Hi Llewelyn, I am very interested in your mean reversion strategy. I have been looking at this type of strategy for some time. I have bought both of your ebooks and think they are outstanding. I also read your blog and receive your emails. Do you have any plans to share more details about your mean-reversion strategy? I would love to know more about it and compare it to some of the ideas I have been researching. Best, Scott
Some basic tips that I don't mind sharing are that I use a 6% stop (close only) and I am trading oversold stocks that aren't too expensive based upon industry average P/S and P/E ratios
Further, the average gains that I am currently making are not typically this good...I expect them to level out more over time. The historical performance suggests that I should have roughly 1/1 risk reward on my trades but a 70% win rate. So far my winning trades have been much larger than my losses. I'm not expecting that to continue.
Thanks for sharing the additional information. I am curious how/when you decide to take profits. Not that I am asking you to give away the "secret sauce," but if you can share... Do you use a profit target, similar to the strategy you outline in your candle pattern book?
Hi Scott, no profit targets. I use a combination of indicator readings for exits.
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