Are you an Price Action or an Mean Reversion Trader?

bsbZenbsbZen Posts: 84
Hello all,

For those who dont know what the difference is between Price Action and Mean Reversion:

Price action are strategies where there is a trend and you are betting in the direction of the trend. In the direction of the existing movement. So mostly you have trending markets and trending bollingerbands here.

Mean reversion means, that the prices are moving around a certain price level and every time the price moves too much to one direction then it retraces back to the mean. these are called ranging markets as well and is a quiet market with little news. So in such a market you expect parallel and flat bollinger bands.

Now what do you prefer to trade?

To be honest i am a mix trader in this, i love to trade price action strategies, but i also do like mean reversion strategies.

Looking forward to hear from you all :)

Kind Regards,

BSB Zen

blueskybinary.com

Comments

  • OkaneOkane Posts: 1,266 admin
    edited February 2017
    Price Action all the way!
    But I must add, price action includes a wide range of technical analysis.
    For example, pattern recognition, trends and micro trends, multi-timeframe analysis,
    convergence and divergence, obviously support and resistance, candlesticks, volatility etc.
    I would say price action is an art and if you are looking at charts and not just at the indicators then you are using price action but the combination is also price action.
    But just like an art, everyone can pick up a brush or buy a piano but not everyone can draw or play but also, not everyone draws or
    plays the same way so it doesn't make it right or wrong necessarily.

    In addition, I think anyone who has an understanding of price action will always perform better so what I'm saying is that, you obviously know price action (the way you explained the market in your post) so you would perform better with the bollinger band or any indicator-based strategy thanks to that knowledge of price action already in your backbone. And as you said yourself, "you are a mix" because price action is not like an indicator you can simply "remove". Once you know it, then it's there, you can't un-see it haha ;) - hope this makes sense.
  • bsbZenbsbZen Posts: 84
    Thanks for your interest Okane :)

    It definitely makes sense.
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