Decoded Intelligence Signal
Mean Reversion System
advanced
strategy
Verified: May 27, 2026Lexicon Core Definition
A rules-based trading approach that seeks to profit from price returning to its statistical mean after reaching an extreme. Mean reversion systems require a ranging market condition (ADX < 25), enter against the immediate price direction, and target the return to a central level (Bollinger Band midline) rather than a new extreme in the entry direction.
Analysis Breakdown
A rules-based trading approach that seeks to profit from price returning to its statistical mean after reaching an extreme. Mean reversion systems require a ranging market condition (ADX < 25), enter against the immediate price direction, and target the return to a central level (Bollinger Band midline) rather than a new extreme in the entry direction. Full explanation coming soon when Journey 16 content is ingested.