Intermediate
Understanding Mean Reversion Strategies
A comprehensive, from-first-principles course on mean reversion for quant analyst aspirants, prop trading applicants, and traders looking to systematize their approach. Covers the statistical logic of reversion (z-score, autocorrelation, half-life, the Ornstein-Uhlenbeck process), single-asset strategies built on Bollinger Bands, RSI, and moving averages, volatility reversion using India VIX, valuation and sector-level reversion, an introduction to pairs-based reversion, and a full Python backtesting workflow. Closes with the failure modes that turn a reversion trade into a falling knife. Built entirely on real NSE and BSE data, with Python throughout.
Mean ReversionZ-Score Trading SignalsBollinger BandsRSI StrategiesIndia VIXValuation ReversionBacktesting
MODULES
8
DURATION
~5.1 hrs
TRACK
Quantitative Finance
What You'll Master
Why prices, volatility, and valuations tend to pull back toward a statistical 'normal', and why some things never revert
How to measure how stretched a price is using z-score, autocorrelation, and half-life of reversion
How to build and trade single-asset reversion strategies with Bollinger Bands, RSI, and moving averages
How volatility reversion works and how to read and trade India VIX spikes
How valuation and sector-level reversion play out on the NSE, from P/E compression to out-of-favor sector rotation
Where single-asset reversion ends and pairs-based statistical arbitrage begins
How to design entry/exit rules, size positions, and backtest a mean reversion system in Python without falling into common backtesting traps
How to recognize structural breaks and trending regimes that break mean reversion, using real Indian market failures
Access Level
LEARNER
Everything included
Full Text Playbooks
Actionable Exercises
Mobile Reading Mode
Lifetime Updates
Curriculum Breakdown
Chapter 1: The Logic of Mean Reversion
4 Lessons▶
What Mean Reversion Means: Prices, Spreads, and the Pull Back to Normal10 min read
▶
Mean Reversion vs Momentum: Two Opposing Views of How Markets Move9 min read
▶
Random Walks, Stationarity, and Why Not Everything Reverts11 min read
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Case Study: Nifty 50's Post-Crash Reversions vs Stocks That Never Came Back12 min read
Chapter 2: The Statistical Toolkit for Spotting Reversion
4 LessonsChapter 3: Single-Asset Mean Reversion Strategies
4 LessonsChapter 4: Volatility Mean Reversion
3 LessonsChapter 5: Valuation and Fundamental Mean Reversion
3 LessonsChapter 6: From One Asset to Two — An Introduction to Pairs-Based Reversion
3 LessonsChapter 7: Building and Backtesting a Mean Reversion System
4 Lessons▶
Designing Entry and Exit Rules Around a Z-Score10 min read
▶
Position Sizing, Stop-Losses, and Holding Periods for Reversion Trades10 min read
▶
Case Study: Full Python Backtest of a Multi-Signal Mean Reversion Strategy on NSE Data14 min read
▶
Common Backtesting Traps: Look-Ahead Bias, Overfitting, and Survivorship Bias11 min read