Attention Economy


Friday, July 8, 2016

Financial Trading – Simple Strategies

Why Traders Have Lost Their Touch by Satyajit Das
Satyajit Das notes:
“During more volatile periods, traders can take advantage of mean reversion. If something has fallen or risen after an external shock, then you buy or sell it assuming that the value will revert to a long-run average. A subtler version of this strategy exploits correlation. If something tends to move in a particular way relative to something else, and then the relationship breaks down, traders assume parity will eventually be restored.