3 Best Mean Reversion Trading Strategies: Backtested Buy and Sell Signals Analysis

Today we are presenting three free mean reversion strategies. They were partially published on this website a few years back, and today we make some minor adjustments and present their performance on different ETFs. Furthermore, we discuss why mean reversion works and which markets are best for mean reversion trading strategies, and also some historical backtesting.

Mean reversion is originally a statistical term, first mentioned by Francis Galton, the hero of the famous trader Victor Niederhoffer, but today mean reversion is mainly a financial term.

We start with defining what mean reversion is: