Reversion to the mean or how things usually come back to their average state

Can sweet peas teach you how to be a better Forex trader? There are some major principles of play in our universe. Those phenomena are valid and available for practical usage in many aspects of today’s life. Let’s talk about one of those main principles.

It is called the mean reversion - the regression toward the mean or reversion to the mean.The principle was firstly formulated by Sir Francis Galton after his experiment with sweet peas. The observation by Sir Fransic Galton was later translated in modern financial language and the translation goes like this: "The price tends to return to its average". In other words - no matter how strong a particular trend or single move is it will return back to its average. For example, a strong up move in EURUSD will retrace down, or a steep downtrend in GBPUSD will, at some point, go back up to the average.

As you can see there are a few key moments here: how to identify a strong move? When will the reversion to the mean start? When will it end? The answers to those questions will give you quality trading idea, an entry point, where to open a position, a level where to put your stop and a target where to get your profit. You can find the answers to these questions in the OneForex educational packages. One of the building blocks of this educational program is exactly the reversion to the mean and its practical applications in Forex trading. Since the beginning of the OneForex program hundreds of learners have started to use the mean reversion principles for a better trading results. If you want to be one of them join the program and you'll get access to video content where a world renowned author will help you unveil the secrets of the universal principle of reversion to the mean. Check out the Forex packages HERE