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Mean reversion vs. trend following

Sachin Yadav

Mean reversion or trend following — which approach do you prefer?

I've been thinking about how different trading strategies perform under different market conditions. Trend following aims to capture directional moves, while mean reversion looks for price to return toward an average after moving away from it.

The difficult part is knowing which market environment you're dealing with.

Do you use a trend filter before taking mean-reversion trades? What signals help you decide when a setup is worth taking?

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