If you are new to the day trading business, you must understand the difference between mean reversion and momentum trading in forex and stock markets. Reversion and momentum trading are the two dominant trading strategies used in the forex and stock markets. Most of the trading strategies we can think of fall into the category of mean reversion or momentum trading. These two trading strategies show completely different market timings. For example, Momentum Trading tries to get an entry when the price is showing a strong direction. Momentum trading is often considered a trend-following strategy. Regression trading, on the other hand, attempts to get an entry when the price is far from the average. Mean reversion trading is often the core trading principle behind “selling at low prices and high prices” strategies such as value investing. In vigorous trading, traders try to select a trend, while in mean reversion trading, traders try to select a turning point. We have briefly described some basics of mean reversion and momentum trading strategies. If you really want to survive in the day trading business, you need to dig deeper into this topic. Books: Science Of Support, Resistance, Fibonacci Analysis, Harmonic Pattern, Elliott Wave, and X3 Chart Pattern (In Forex and Stock Market Trading) are just books dedicated to this topic. This book tells the secrets of mean reversion and vigorous trading strategies. This book can be found at all major book distributors around the world. Use the links below to choose the best book distributor, including Amazon.com, Google Play Book, scribd.com, Apple Book and more.
Within the trading community, the preferences for mean reversion trading and momentum trading are completely different. Some traders use mean reversion trading more appropriately, and some traders use momentum trading more appropriately. To find a trading style that you are good at, you need to try both trading strategies. In fact, mean reversion and momentum trading can explain the water and fire elements of human nature. Regression trading describes the human characteristic of being “cautious” or “realistic” like water. Momentum trading describes the human character of fiery “impulsive behavior” or “hearing behavior.” However, wise traders do not consider these two trading strategies to be two different subjects as they occur one after another.
Once you understand the difference between momentum trading and mean reversion trading, you need to understand the tools to execute your strategy. There are many tools from value investing, pair trading, fundamental analysis, support, resistance, trend lines, triangle patterns, ascending wedges, descending wedges, channels, Fibonacci ratio analysis, harmony patterns, Elliott wave theory, X3 chart patterns. We provide automatic pattern scanners to facilitate your transactions. You can look at these two pattern scanners to achieve either momentum trading or mean reversion trading strategies.
1. Harmonic Pattern Plus
Harmonic Pattern Plus is a repainted harmonic pattern indicator, but it is a very good product in terms of price. It has dozens of powerful features such as pattern completion intervals, potential reversal zones, potential continuation zones, automatic stop loss, and profit sizing.
Below is a link to Harmonic Pattern Plus
2. Price breakout pattern scanner
Price Breakout Pattern Scanner is a powerful pattern scanner designed to solve market geometry puzzles beyond technical indicators. The Price Breakout pattern scanner, which combines the built-in Japanese candlestick pattern with the smart Renko feature, helps define the exact market entry of breakout transactions. This is a screenshot of the Price Breakout Pattern Scanner.
Below is a link to the Price Breakout Pattern Scanner
Reversion and Momentum Trading Strategy-Trading System-August 2, 2021
https://www.mql5.com/en/blogs/post/745106?utm_campaign=RSS&utm_medium=display&utm_source=MQL5+EN+Blog Reversion and Momentum Trading Strategy-Trading System-August 2, 2021