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Articles tagged by mean reversion

And Another Thing... Apparently people are struggling to make money in foreign exchange markets this year - as I heard for the thousandth time earlier this week! Mean reversion is playing a role, without doubt, but there is something, more basic, at the heart of participants' struggles and one person's experience from Brexit night is illustrative. How can it be that people have missed out on making money on a well-signalled, prolonged move in FX markets? Here is one possible answer - and it goes back to the roots of trading methodology
And Finally... Once upon a time, a very, very, very long time ago, a generation of traders (of which I was one) was introduced to the concepts of crosses. This introduction was not without some mishaps of course, but it was an invaluable outcome of our elders and betters teaching us how to read markets, more specifically how to identify drivers of moves in the main currency pairs. It is hard to escape the conclusion that in the modern FX market, such skills are thin on the ground.