Momentum and mean reversion: two opposite stories
Know the evidence behind both ideas, and why having both on tap lets any chart be explained after the fact.
Module 6 of 26, Market mood, the day’s average price, and fair tests. Lesson 5 of 6, about 18 minutes.
The takeaway
Momentum and reversal are real patterns in old data, but they work at different time horizons. Once you know both stories, any price move can be explained backwards.
This page is a public summary. The full lesson has the worked examples, an interactive exercise and a short quiz, and sits in the course. Lessons 1 and 2 of Module 1 are free and the rest need a pass.
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