Mean Reversion Trading without Indicators

[@TheTransparentTrader]

I hope you enjoy this video showing you how you can trade mean reversion without using any indicators at all!

[@matthunter9562]

Is that this strategy still work if the market in the trending condition?

[@johnshugo9608]

Hello, sir.. I used an idea from this video. I made an EA based on the tutorial you provided. I made some modifications to the strategy. I provide a link to download on my web for reference. I hope you don't mind me including your video link there.

[@TheTransparentTrader]

@@johnshugo9608 Well done! I always encourage testing and modifying for yourself. What are the modifications?

[@johnshugo9608]

@@TheTransparentTrader Thank you sir. I use the highest high and lowest low of 6 candles and the running price for the execution (not the close candle price).

[@jktrader37]

@@matthunter9562 I would ONLY use a mean reversion method ( during a trend) in the direction of a the primary trend ( otherwise you will be cut to pieces).. i.e,. if the trend is UP, only take mean reversion trades that would place you in the BUY LONG mode, ( i.e., shorts will most likely be killed ) I hope that helps

[@OhhHellNoYouWont]

Eventually, professional guidance may be the only recourse!

[@EButz]

how so?..if u don’t mind please could u shed more light on this

[@Couchlnvestor]

For starters you’ve got to understand that trading is no walk in the park, you’ll be needing lots of study and practice before trying out real trades even then you’ve still got to go easy.

[@EButz]

lol blew my account twice already

[@OhhHellNoYouWont]

Well, I’m convinced that the key to safer trades and lucrativeness is professionalism.

[@OhhHellNoYouWont]

Over the years I’ve been very fortunate to work with a certified broker Christine Mila, I met her at a summit in Oklahoma where we discussed how she can guide me on the technicalities of profiting in the market and if I’m being honest I’ve had numerous withdrawals under her guidance.

[@cryptinu]

I’ve just been manually testing this on tradingview and am really impressed with the results. Will back test this properly and take notes. Thanks a lot Jarrod.

[@raymondphilip6232]

Use mt5 bro, easier to backtest

[@raymondphilip6232]

Just a recomendation, look it up when u have time

[@TheTransparentTrader]

Great! I always encourage everyone do their own testing too.

[@randomz8065]

what was the result of the back testing

[@TamerRashdan]

It works until it doesn’t

[@Cor430vette]

Thank god I found you...you are seriously the only mean reversion trader on you tube...!!

[@danield.thompson6158]

Very true

[@ryeez919]

Trading without indicators " and this line here is a moving average" OH HERE WE GO

[@pchan4267]

Regression to the mean is a very powerful indicator. Thanks for sharing.

[@howardhill3395]

I think using a moving average (mean) is very helpful.

[@nm6287]

Hi ,,your video is simple, but is great,, you teach one of the most important thing in trading,,,,many people don´t understand this concept for many years and is the core concept for entry in a trade , congratulations

[@sitthapromwasphornsaran5736]

I trade with a mean reversion indicator together with other indies, and love it.

[@eddyvideostar]

To Sit hapromwas ph: Info, link and data, please.

[@MrAcSP]

What kind of mean reversion indicator are you using? I am using on balance volume oscillator with the settings Periode 14, Levels for reversals at 20 and 80 and only on the H4 and daily charts.

[@chekov885]

You never mentioned the stop location and TP you used in back test. Also what was the account size and trade size????

[@Louis-yg3xq]

Excellent, the best trading coverage on KZbin by a country mile!

[@TheTransparentTrader]

Thanks Louis! Glad you find it useful. Just sharing how I study the markets in order to develop strategies.

[@davemakesmagic]

This was really fascinating. THANK YOU!!

[@andrewmuchtar9286]

Amazing, very simple method yet effective. Thank you for sharing the knowledge. God bless you.

[@Patso65]

Really enjoyed this video, thank you for sharing. With just this information alone, a trader could literally make a living from just this information. MANY ways to trade, but, the equity curve doesn't lie. Thanks again.

[@jdaniele]

Thanks a lot Jarrod🙏 That's very interesting👍😁

[@alrey72]

Haven't tested this yet but the market can move a long way in one direction w/o the reverse signal and the loss will be huge.

[@alrey72]

@@jakesanders136 It was mentioned in some comments that there is no sl. The buy signal closes the sell postion and vice versa.

[@jaysteve4442]

Of course u would have stops in place. Gotta know when you’re wrong

[@OneCreator87]

Don't trade 100 lots and you'll be fine. Also, don't use this on GBP and pairs that like to do the thing you said.

[@lakshaydhiman6132]

No

[@markman1276]

Great topics and videos. Thank you dear.

[@jdelaney993]

am i not understanding this properly? so if you are looking back at the last 6 bars, and the last bar in your scope is the highest close in the past 6, you would immediately open a short? And opposite for longs? Someone please tell me i'm misunderstanding that right?

[@maninjapan79]

A little late to the party here, but how do you define a 'strong Close'? Are you looking at a large range day? And/Or the close in relation to the high/low of the day?

[@fxsurgeon1]

What is your exit rule? Thank you for the insights

[@ManifestedUniversalDestiny]

This equity curve is nice...thanks for sharing!

[@sheana2005]

Really like your analysis and enjoyed the video.

[@alexander__5400]

No transaction costs?

[@EEMBMinecraft2442]

I enjoyed the video and study. Thank you. I really liked that you kept it simple, gave a clear explaination and are able to present the statistics. I do have a request. Can you elaborate on what a "quite a strong" close is? Id like to hear more specific details. Have a great day.

[@scalpingpro6896]

Great video bro . Pls why 6 candles?

[@double-n]

Great video, would have helped if you had mentioned it's a stop and reverse type of system with a fixed stoploss :) No matter, the comments cleared it up for me. Thanks!

[@jamesyen241]

Thanks for sharing!

[@allexuk78]

Insightful video as usual. Thanks a lot!

[@ShareefusMaximus]

Hi all. The exit is stop and reverse!

[@crosselen9766]

Your video is really concise, I think I will test it out with crypto. Thankful for the strategy and wish you good health!

[@dev07845]

Jarrod great video learning a lot from your content,plz could u do a video on the mean reversion on say bollinger band a practical strategy how u take the trade and exit i assume at middle band,would appreciate a video on the strategy thanks

[@michaelsaunders1558]

You just told him effectively the strategy and then asked him to demo it?

[@AhmadAli-uu3tr]

Amazing. Thank you

[@craigolson469]

What is the close signal? Is it the opposite of the buy signal?

[@majallal]

Great vedio , thank you for your helpful information

[@crunchyroll7734]

Does this work on stock too may I ask?

[@narendramanikanta7597]

Thanks for sharing the knowledge

[@bbecky2010]

What is the Exit strategy?? Thanks.

[@lionking20101000]

thank you so much

[@laptoplifestyleromania569]

no words about stop loss

[@oxbys3531]

Check charts over 10 years, everything returns to original levels. You have a window of opportunity every few years to make 1 killer trade requiring patience and 4:1 margin you can clear over 1Million profit, all you need is time.

[@peterloei9223]

This advice is very useful.. thanks a lot

[@LibertyOrGTHO]

What is being used as a take-profit? How long is he holding for?

[@pirunsirimangkalo2385]

thank you

[@malcolmring6229]

Hi That was very interesting and useful. The way you showed the chart hand drawn they looked like inside candles. Does the same apply to 6 trending candles? Thanks

[@tshepomosili2599]

He drew that moving average smoothly

[@Evo-bro]

good resource, thank you for putting it out there. I use a ema bounce m15 candlestick strategy and feel this will help with it. Can I ask what software are you using to backtest?

[@kanagarajahm4427]

Very interesting tq, will try it out.

[@raymondphilip6232]

This is really good content, i'm glad not so many people found it because good legit contents only reserve for the 6% lucky profitable trader

[@aslanmuradekmekci5277]

Hi Jarrod, from comments below, I see that this is a stop & reverse type strategy. But how about the market behaviour the day before which we use as a filter? I mean, say, it was an up close yesterday which means that today I will be taking only long trades between 14:00 pm to 19:00 pm EST. Between trading time window, a set up formed and I opened a position. And then a stop & reverse pattern formed which encourages me to close my long position and open a short position. However, yesterday' s market behaviour (which I use as a filter) does not suggest me to do so. So, may I still use stop & reverse as an exit strategy? Please advice,

[@aslanmuradekmekci5277]

The same question may be asked for the Bollinger Band 30 minutes timeframe intraday strategy you developed for GBPUSD (yesterday' s market behaviour is a filter).

[@antoniobertone7589]

Where do you take profits?

[@howardhill3395]

Jarrod, as I understand it, if previous day was a strong bull candle, you will go long in new day against strong bear candles...do I have that correct?

[@adrianp4590]

are trading commisions included in backtesting result

[@khalidhakimi93]

Ive been trying to figure out the market monopoly and indicators can be a distraction and I would at times be overloaded with information and end up trading the indicator rather than the price. I’m going to try trading candle closes with resistance and support levels and market highs and lows in the trend. I’ve been in this game for 5-6 yrs now and it’s very frustrating if I think about how long I’ve been in it and haven’t been profitable

[@aaronb4685]

I guess I dont understand. What if you go short after 6 green candles and it goes up 6 more? When do you get out before being liquidated?

[@patmontes2]

Where is the take profit?

[@yochanangolan9600]

thanks for sharing this knoledge - but when i look on charts most of the time it doesnt work. may be the robot you showed include more filters.

[@Bhoomy98]

I would ask you some clarification over your strategy: since you invert the current position when you get an opposite signal, what happens to the open trade when you have an opposite closing the day before or similar when the trade is crossing the preferred time zone 14-19 EST? are you closing the trade or you leave it going?

[@TheTransparentTrader]

Hi, using 15 minute bars only take the entries or exits if they occur within the time window. If you are already in a trade and an opposite signal occurs but you are not within the time window then leave the trade running until you get a signal within the next time window.

[@doubtannihilator2895]

Excellent 👌

[@jimparsons6803]

Interesting.

[@luccanovaes8604]

Thanks!!!

[@AJohnson0325]

Where do you put your stop? When do you exit? I’ve seen some mean reversion strategies that use a time based exit if it doesn’t close higher. The win rate is high but if you’re trading futures you could get your face ripped off by the time the time based exit kicks in.

[@larrycox6614]

Thanks for this insight. I'm going to back test it on TV on the 5m and 15m timeframe to see what results I can get. So when you said..."if we have a strong close to the downside (or upside), then that's the direction you would be looking at trading in for the next day. How much of the close are you looking at to make that next session determination...the last hour, the last 2 hours, etc. ?

[@alfred604]

Your videos are high quality!

[@TheTransparentTrader]

Thanks!

[@BILLYJEAN1-o6m]

Interesting, I've been trading for 10 plus years & often the projections of equity curves don't match reality when it comes to algo live trading. Depends on the data you use & how robust the stradegy is through all market conditions.

[@djxenomuzik]

Thanks again Jarrod!

[@PriyaPriya-qm3pl]

Very good

[@r3teacher294]

A moving average is a technical indicator lol. But it's OK I understood the idea. Thanks for sharing!

[@sergiuserdean7056]

Hi.Where do you exit trades?

[@terrysenyczko121]

I like your videos I like people who back their ideas with proof I am a flandering trader who's been in the middle forever make money lose money make money lose money make money lose money

[@absolutebosscollective8202]

Very Insightful!

[@lapogk1543]

If the lower close is happening in every 30 min bar, will you keep buying at every lower close. What is the stop loss

[@zjelco]

How do you enter on the second candle of the previous six? In case of going long and the second candle is the lowest close out of the six. Or do you only check the last close and see if it's the lowest of the past 6? Thanks

[@Nobodier]

TP, SL ?...

[@briankelly2037]

Lots of "food for thought" in this video. Thx. I think the strategy should work best on non-major-news days. Also, there are some currency pairs which tend to bounce around a lot during the Asian session (e.g. gbpchf, eurchf, gbpusd etc) but don´t normally trend. An ideal situation for mean reversion strategies. I haven´t looked at it yet but there may also be a quiet time later in the European session before New York trading begins. Lots of opportunities to test and apply these strategies.

[@jaybee9054]

Curious - what's the reasoning behing looking at the candle close instead of high? After all it's just an arbitrary point in time based on the time frame we''re looking at

[@TheTransparentTrader]

I find closes very significant. Is it because a lot of other traders are also paying attention to the close as a level?

[@gozzilla]

can this be applied to trading OPTIONS as well? i mean the 6 candles?

[@anthonybruce8296]

Where are you exiting these trades ?

[@TheTransparentTrader]

Hi Anthony, this is a stop and reverse strategy. The exit to a long is the entry to a short and vice versa. Unless stopped out.

[@billmietelski]

@@TheTransparentTrader Define "unless stopped out", please. :) Equity curves don't mean much if you're insolvent.

[@guillermoochoadeaspuru625]

@@billmietelski if you don't understand what stopped out means, then you are the insolvent one here.

[@billmietelski]

@@guillermoochoadeaspuru625 Lol. Guillermo, thank you for your wonderfully ignorant assumption. Definitely not insolvent. I thought it was a fair question. I thought "Stop and Reverse" meant you were always in a trade, either long or short. I also thought "Stopped Out" meant you exited a trade. You can't always be in a trade, and not in a trade at the same time. I've never been a fan of the stop and reverse technique, so maybe it doesn't mean what I thought it did. My English not so good. If I got it wrong, I hope you and your one subscriber can forgive me. Lol.

[@mewithbaby-1187]

where to download the powerlanguage code for this strategy ?

[@suntouch3r]

Last 6 years look similar to buy-n-hold returns. 6% per year?

[@paularcher102]

This method because we are trading with HINDSIGHT?. We already know from looking back thru the history of the price action is UP.. Would this method work if I started today?.

[@hugonongbri8100]

Any reason for using bars instead of candlesticks ??

[@TheTransparentTrader]

No, I am just used to using regular bars. Either works!

[@soleray2]

GOOD DAY SIR, SIMPLE BUT GOOD, QUESTION IS EXITS OR STOPLOSS DIDN'T MENTIONED, WHEN AND HOW ? THANK YOU SIR.

[@alfred604]

Just a quick question about exiting, you are in the trade until you get a opposite signal?

[@TheTransparentTrader]

Yes. It's a stop and reverse type strategy.

[@alfred604]

@@TheTransparentTrader Thank you for the reply.

[@eddyvideostar]

At 2:36 minutes, onward. This illustration of mean reversion is not a trend-bearing situation.

[@flamehands3416]

Was this strategy ever proven to work? I really like the method described here however i dont think trading costs have been factored in.

[@PriyaPriya-qm3pl]

Very nice. Thank you . Wish to see more of your videos in the future.

[@kanagarajahm4427]

What the best time frame to use this or get into a trade?

[@sugengprofit9993]

what are the good currencies to use? EUR, GBP, AUD ect?? cross rate maybe?

[@parkerberlin4410]

I like mean reversion combined with a 12, 33, 120 day moving average. A macd doesn't hurt either

[@innav4874]

I repeated it in python backtesting system, as an algorithmic strategy, with those two rules of buy and sell. Complete disaster! Where do you think can be a difference ?

[@danield.thompson6158]

Is this strategy timeframe bound? And how many pips should the stops be ?

[@TheTransparentTrader]

This is an example of a mean reversion strategy without indicators. It's not a complete strategy yet. Markets do move different for different timeframes so just because it works on this time frame doesn't mean it will work on others. This is why it's so important to test.

[@Cor430vette]

Time frame 15 minutes? So highest lowest close over the last 1 1/2 hours?

[@TheTransparentTrader]

Yes 15 minutes. So the highest close and lowest close over the last 1.5 hours using 15 minute bars.

[@Cor430vette]

@@TheTransparentTrader Got it thanks a million!

[@jazzthedog1]

@@TheTransparentTrader Confused. How do you get "6 hours" in this equation? 6 15min bars is 1.5hr? Sorry, also there is no real stop loss or take profit in this strategy either?

[@TheTransparentTrader]

@@jazzthedog1 Sorry, I made a typo! I meant 6 bars so 1.5 hours. A fixed 200 pip stop loss works well with this strategy. There's no fixed take profit target though.

[@jazzthedog1]

@@TheTransparentTrader Thanks so without a fixed TP, you just close out the trade when an opposite signal appeared? That was what you used in our back test?

[@tomlewis632]

The market can stay overbought or oversold, longer than you can stay solvent. This is the problem with mean reversion. And breakouts suffer fake outs, due to manipulation. Need other tools.

[@therogerwilco]

You're a math/finance major I assume? What's your stop loss % usually also? Just wondered if you feel arbitrage orders have created much wider swings or am I overestimating the market makers influence? Thanks very much!

[@dirkdarwin2571]

5:09 -- So you're shorting a breakout? Sounds dangerous...

[@HitAndMissLab]

In journalism they say if celebrity or politician survived for 11 days after a big scandal, than he'll be out of harms way. Jarrod just proved the same thing in markets, but its only x6 days. I market was shocked into a direction, effect will fade after x6 days.

[@Phurngirathaana]

Whether the other bars are 6 bar highs themselves is irrelevant?

[@TheTransparentTrader]

We are only looking at the closing prices in this strategy.

[@atatunca4776]

I have a question about if it's a downward trend and each new bars closing is smaller from the previous six bars.Than what happens? What ı understand is that the algorithmm should buy buy buy ... and so on! Is that so?

[@TheTransparentTrader]

The algorithm will only buy 1 position even if the trend continues downward.

[@IkennaIloejeo]

@@TheTransparentTrader thanks for this. Please how do you code it to not continue to buy with lower closing prices in a downtrend? I believe it will keep buying and losing until a reversal occurs?

[@a.b.712]

i dont think it will work with crypto market, sometimes you need to wait 60 candles before taking entry lol. Why 6 candles only? didnt understand why 6

[@FuturesBrizio]

You mentioned the best time to trade this is 14:00-19:00 EST? That's New York time?? Seems like an odd time but maybe that's true.... What do you use for a stop loss?