Mean reversion trading involves identifying periods when EUR/USD has deviated significantly from its historical average and taking positions to capitalize on the expected return to the mean. Traders employing this approach often analyze critical moving averages, observing the extent to which prices have diverged from them within a brief timeframe, before making trading decisions and betting on a reversal.
Want to gain an edge in the FX market? Learn how to harness IG client sentiment data to inform your trading decisions. Download our guide now!Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits.
We recommend that you seek independent advice and ensure you fully understand the risks involved before trading. Information presented by DailyFX Limited should be construed as market commentary, merely observing economical, political and market conditions. This information is made available for informational purposes only. It is not a solicitation or a recommendation to trade derivatives contracts or securities and should not be construed or interpreted as financial advice.