Why Mean Reversion Strategies?
For more than a decade, Larry Connors and Connors Research have shown that for short term traders of equities and equities-based markets, mean reversion strategies can produce higher per trade win rates with only a moderate exposure to the market on a day to day basis. Mean reversion trading strategies are based on taking advantage of markets when they reach extreme levels. After thousands and thousands of simulated trades in hundreds of widely-traded stocks and exchange-traded funds (ETFs), Larry Connors has shown that per trade accuracy rates of nearly 70% are possible using strategies based on buying markets after they have pulled back, and selling them after they have recovered. With exchange-traded funds – including leveraged ETFs, those accuracy rates can be even 10% higher or more than they are with stocks. Why Trend Following Strategies? Mean reversion strategies help traders buy stocks and ETFs after short-term sell-offs and sell them after short-term rallies. Although mean re
