Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I first started trading/following ES in 2010 or so. While ES have always been a mean reversion instrument which tends to backfill/retrace quite a bit, I seem to get the feeling that this tendency have become even worse since then.
It snaps back and forth quite violently...
Any comments?
Can you help answer these questions from other members on NexusFi?
I have only been trading ES for about a year. I have noticed anecdotally that pullbacks retrace a 5 minute bar downward much deeper and more frequently today than when I started. When trying to analyze the battles between bulls and bears the retest of the current bar's low can give clues to who might be in charge.
I did a brief visual backtest of the last 120 days and found that almost without exception - ES always retraces back to the breakout point or usually more after making new highs/lows intraday before continuing to make new highs. Of course there's also the frequent false breakouts.
It seems rare that ES does a truly directional move without any retracement.
The question is if this have become 'worse' or more pronounced than in the past. I have not done any extensive studies on it myself, but I believe this to be true.
I don't know how you can say the S&P 500/ES is mean reverting by any proper definition of the concept.
IMO a visual backtest is completely worthless. They eye is so easily deceived and you will just find what you expect to find a priori .
Of course we certainly are in a different regime than the post financial crisis with with all kinds of central bank intervention and now at much higher valuations.
IMO the only thing we really know about markets is tomorrow won't be exactly like today and we never come back to the same place.
Even just think about the market cap distributions from 2010 to now of the underlie.
