DVPO

A mean reversion trading strategy is founded on the principle that asset prices, after experiencing significant deviations, tend to return to their historical average or "mean." This approach can be applied to various financial instruments, including major cryptocurrencies and stock market indices, which, despite their distinct characteristics, both exhibit tendencies to revert to a perceived baseline over different timeframes.

Core Concept: The fundamental idea is to identify when an asset is "overbought" (traded at a price significantly above its mean) or "oversold" (traded at a price significantly below its mean). A trader employing this strategy would look to sell or short-sell an overbought asset, anticipating a price decline back towards the average. Conversely, they would buy or long an oversold asset, expecting its price to rise towards the mean.