There was a really good discussion of this topic on the thread: Reversion To the Mean (RTM) Intraday Strategies http://www.elitetrader.com/vb/showthread.php?s=&threadid=148718 I highly suggest that you read it first
try introducing time into the equation. So instead of betting how high or how low, you are betting on how long? for instance, how long before it usually reverts to the mean?
so you're making a decision about the thread solely based on reading the first few pages Do you also take the same lazy ass approach with your trading?
In any aggregate index up = a tendency to trend, down = a tendency to chop. So, all ya gotta do is figure out when it's going up, and when it's going down. What could be easier?
well, that's what I am saying. Let's say you have determined that the market chops 85% of the time and trends 15% of the time. It will never help you determine what it is going to do next, but once it violates it's historic time average, you can start betting on reversion to the mean. and really, isn't that all trading is? betting on history they don't write about people that do it year in and year out the only ones you hear about are the ones that bet "this time is different" (or more correctly, the "one")
I found value in the thread. Thanking Hurricane for linking to a good thread. Its hard to find otherwise good threads among so many useless threads on ET. Thats all.