Disliked{quote} Hey AntiCre, care to explain more? do you mean your entry position is static, but the mean keeps moving? within certain limits, averaging can help Statistics is not my field, however there should be conditions under which a stationary Gaussian random walk could exist. Of course, one must evaluate the applicability to the market hint: check the Ornstein-Uhlenbeck process {image}Ignored
this as been just an attempt to explain why that person wrote that the probability differs from 50 % (for going back to the MA, or away). It's not been any recommendation for trading. I even believe this scenario may be hard to trade without considering further measures, e.g. the overall trend, and the trend on a smaller scale
To put it imple: Look at a Bollinger band. A trend can be considered to be strong if it leaves the band. However, even during the strongest trend there will be a retracement. And since the SMA of the BB is a lagging indicator, you will see it pushing up (during an up trend) even though pice retraces back towards the band. This "pushing up" behavio makes it more likely that price leaves the BB because during an upcoming retracement it will be quite likely hit the SMA.
Best,
AC
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