Mean Reversion Strategy
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Lesson

Holding clocks

The same reversion premise behaves like four different strategies depending on how long you hold. This is why the worked example runs four models, not one.

Four clocks, one idea

A stretch that closes within an afternoon and a stretch that closes over a month are the same idea on paper and almost opposite strategies in practice. The holding clock — how long you expect the reversion to take — changes the mean you measure against, the size of move worth acting on, the cost that eats your edge, and the kind of risk that ends the trade. A single set of rules cannot serve all of them, which is the entire reason the worked example splits the premise across four models.

The shorter the clock, the smaller the move and the tighter the math

On a same-session clock, the mean is a recent intraday level and the stretches are small — fractions of a percent. The edge per trade is thin, so it has to be harvested often and protected fiercely from costs and slippage; a wide spread can erase a session reversion entirely. On a multi-week clock the mean is a longer average, the stretches are large enough that costs barely register, but you are exposed for days to the risk that the stretch was a real change in value rather than a temporary one. Same premise, completely different problem.

Worked example: the four the #1-ranked provider mean-reversion models, 2026 year to date.
Model (holding clock)2026 returnWin rateTrades
Swing Reversion
roughly one to four weeks of hold
+225%74.4%78
Session Reversion
opened and closed inside one trading day
+95%67.5%308
Intraday Hold
from half a session out to two sessions
+404%71.4%262
Position Reversion
a long, patient horizon
+502%73.8%42

Why the grade has to be set per clock

This is the practical payoff of the holding-clock idea. A 0.70% move is an exceptional session reversion and an unremarkable multi-week one. If you graded both against one absolute bar, every fast trade would look weak and every slow trade would look strong, and the grade would carry no information. So a measured model sets the grade-A bar against each model's own return spread:

The grade-A bar is set against each model's own return spread, not one house figure.
ModelHolding clockWhat earns an A
Swing Reversionroughly one to four weeks of holdabout 6.00% a trade
Session Reversionopened and closed inside one trading dayabout 0.70% a trade
Intraday Holdfrom half a session out to two sessionsabout 4.50% a trade
Position Reversiona long, patient horizonlong-form, no single bar

An A marks the top band of a model's own measured returns and a D the lowest still issued. Because the bar is fixed per holding clock, an A on a session trade and an A on a multi-week swing both read as “top band for this horizon” rather than a single absolute target stretched over very different holds. The scale stops at four bands: an E once existed but left the live product in 2026, so the A-to-D ladder reads cleanly.

Read the table as four translations of one sentence — “this trade sits in the top band for its clock.” That is what lets a reader compare an A on a session trade with an A on a swing trade without comparing raw percentages that were never meant to be compared. The mechanism behind it is on grades that are measured; the reason the grade can be trusted at all is on issued before the outcome.

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