馃攳
Trend Trading vs Mean Reversion Strategies - Which is Better? 馃搱 - YouTube
Channel: UKspreadbetting
[0]
in this video traders we will be talking about
[1]
mean reversion versus trending strategies
[4]
stay tuned
[9]
hey guys warm welcome to you alright so
[11]
when you are starting out for when
[14]
you're kind of finding your feet you're
[15]
like okay well I want a strategy that
[18]
works I want to get something that I
[20]
really can get my teeth stuck into and
[22]
very often the decision comes down about wanting
[25]
to be trading a trend order or wanting to
[26]
trade mean reversion
[28]
Mean reversion being a stretched market that
[32]
stretches to the upside and is about to move back to a
[34]
mean and that could be of a swing
[36]
trading might be a moving average it
[37]
might be a breakout point like a support
[40]
level it might be if you're trading
[42]
intraday of the VWAP and open a prior
[45]
level something like that so it's kind
[46]
of a stretch and a pullback you
[48]
mentioned the Bollinger Band trade very
[50]
much mean reversion to type trade
[51]
setting at the upper Bollinger Band
[52]
buying the lower Bollinger Band closing
[54]
how in the middle trend tuck trade is
[57]
waiting for that momentum and buying a
[59]
pullback and a continuation now the pros
[61]
of either of both others on a trend a
[65]
the profits can be substantial if you
[69]
have that momentum ignition you catch it
[71]
early and you get on it then you can get
[74]
many many many times your risk because
[77]
if you've got a great entry you're
[79]
capping the wrist you've got a sweet
[80]
spot you find a sweet spot and you can
[82]
let it run then fantastic trades the
[86]
downside is with the trending trades is
[88]
that we don't often get trend days we
[91]
don't often get trends now I'm talking
[94]
more from a shorter term perspective
[97]
swing trading it's slightly different
[99]
but if we're talking a short term
[100]
perspective how many trend days do we
[102]
get not that many guys we probably get
[105]
two or three if that in a month real
[108]
trend days like opening at the low
[109]
closing height and high closing low
[111]
obviously depends on the season now I've
[113]
seen it depends on what's going on the
[114]
global news flow etc but that's a rough
[117]
estimate but really what we can say is
[119]
most of time we're getting mean
[121]
reversion now I like trading both
[123]
because I like the
[125]
fact if you got a trend they leave it
[127]
just wait and come back and then you've
[129]
got you know you don't know where it's
[130]
going to go if your thesis is right you
[132]
could have a monster day
[134]
but I like Mira version because that's
[136]
very much seen where the turn is and
[138]
that is something that happens regularly
[140]
you know most days we're going to get
[142]
probes to highs pros to lows probes to
[145]
higher high a prior high should I say
[148]
prior lows etc fails rotations you know
[151]
we get that and as a trade intraday
[153]
trader as something you can really grab
[155]
onto so and it's these similars robots
[159]
or swing traders I know that you get
[160]
markets to do trend but very often you
[163]
know markets will sit in ranges for a
[165]
long time because something like Tesla
[166]
for example yes you've got many trends
[168]
there but very much has been kind of
[170]
mean reverting up looking like it's
[171]
gonna break the highs coming back down
[173]
again you know it's very much been a
[175]
mean reverting traders perfect scenario
[179]
so anyway that's the point the point
[181]
guys is this if you are choosing between
[182]
the two then mean reversion is probably
[186]
the one you want to pick now there is a
[188]
personality aspect in this I understand
[191]
that and what kind of not going to go
[192]
into that at this point now but from an
[194]
operational perspective purely of ok
[196]
what should I get good at what should be
[198]
my first step on my kind of real
[200]
specialist area in my opinion it should
[203]
be mean reversion now it should be a
[205]
point where you get to you should get to
[207]
a point where you have multiple
[208]
strategies that you plug into the right
[210]
kind of day because that really then
[211]
allows you to capitalize on stuff but if
[213]
it you was kind of just trying to get an
[215]
expertise at something then forget about
[218]
the trends for now
[219]
because you want many iterations to
[221]
learn and the trouble is if you're
[223]
trading that's a trend SS assume you're
[225]
trading intraday trend days then you're
[228]
not going to get many of those we're
[229]
getting kind of to a month you've gotta
[231]
wait a long time to get that cycle of
[233]
learning and to get that repetition
[235]
where they feel trading mean reversion
[237]
you're trying to find those turning
[239]
points you're gonna get many of those
[240]
per week you know my of course there's
[242]
gonna be days with nothing's happening
[243]
and you stay away from it but you're
[245]
gonna get many opportunities to put your
[247]
strategies to the test
[248]
you're gonna find out the commonality
[250]
between how why price turns where it
[253]
turns you know what the volumes looking
[255]
like what time of day you start to put
[257]
this together so I would say you know
[259]
this is kind of immerse sponsor to a
[261]
couple of questions of ok I'm trying to
[262]
find a strategy focus on the mean
[264]
reversion strategies folk
[266]
on the type of things that look for the
[270]
low and high of the day and start from
[272]
there
[272]
so to start from what is the higher the
[275]
day got in common with the prior high
[276]
the prior high the pro height and C and
[278]
then just start to work back from that
[280]
what's the lower the day now
[282]
not seeing gonna get the high the day
[283]
Lalo's day every day but if that's the
[285]
major turning point which obviously is a
[287]
high the day's the highest it's been in
[288]
the day Louis the lowest it's been in a
[290]
day so if that's a major turning point
[292]
what commonalities are there in that
[295]
market in the high or low of the day
[299]
print off your chart whatever you to do
[301]
and see if there is some kind of theme
[304]
that runs through the rest of the week
[306]
or the rest of the month or whatever it
[308]
may be and then you can start to piece
[310]
together a strategy and then you can
[313]
start to add some of the price action
[315]
type of strategies like your candlestick
[317]
patterns and not say you have to do the
[319]
program of course you know you've got
[320]
your own strategies but if you are on
[322]
the programming do see some of the
[324]
strategies then that is the kind of
[326]
things you're looking for but other
[327]
things that you might look for are in
[329]
your just your standard candlestick
[330]
reversals a double top a head and
[332]
shoulders something that's textbook but
[335]
in the right condition in the right
[336]
environment so mean reversion Trump's
[338]
trending all day every day purely
[340]
because of the frequency of a mean
[343]
reversion type day
[344]
trend dating is good and it can get
[347]
multiple profits but if you are trying
[350]
to move forward trying to get learn and
[353]
improve then mini versions the way to
[355]
focus because purely because of the
[358]
number of iterations you're going to get
[359]
a number of a frequency of occurrence in
[361]
should I say you're going to get you're
[362]
gonna get more and more and more
[363]
learning learning learning become better
[364]
and better and better in a short period
[366]
of time and then you can start adding in
[368]
the trend a type trade alright guys take
[371]
care get your risk managed whatever your
[373]
training is see the next one bye bye
[382]
you
Most Recent Videos:
You can go back to the homepage right here: Homepage