How to use mean reversion trading strategy: 3 tested examples by traders A lot of different financial time series data, such as price, earnings, and book value, use the idea of mean reversion. An asset is considered appealing for purchase when its current market price is lower than its average historical price. On the other hand, a price decline is anticipated if it is currently higher than average. The timing of individual trading and investing strategies is determined by traders and investors using mean reversion. The underlying assumption of this idea is that historical returns and asset prices are inclined toward ... (full story)