Mean reversion
A strategy that bets on price returning to its average after an extended move in one direction. Works best in range-bound markets. Conflicts with trend-following signals and requires different position sizing.
How Sigmentum uses it
Mean reversion and trend following have inverted volatility profiles: mean reversion wins frequently with small gains but faces occasional large losses when a trend persists beyond the expected reversion point. Trend following wins less frequently but captures large moves. Sigmentum primarily generates trend-following signals — Neutral signals in the feed are often the system's way of flagging that the market is range-bound and the trend thesis is unclear. In range-bound conditions, mean reversion strategies may outperform, but Sigmentum's confidence model will typically suppress directional signals.
Every Sigmentum signal shows the exact values — Mean reversion and the other three inputs — in the AI reasoning breakdown. Free account, no credit card.
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