Mean reversion enters against a recent move, buying a dip that looks statistically overdone, on the premise that price has stretched too far from its recent average and is more likely to snap back than keep extending. It's the conceptual opposite of trend following: trend bets the move continues, reversion bets it reverses.
Because reversion strategies are effectively "buying weakness," they need a real filter to avoid catching a falling knife, a stock or coin that's cheap because it's genuinely breaking down, not because it's temporarily oversold. zengtrade's reversion strategies all pair the dip-buy trigger (RSI, Bollinger Band, or Z-score) with a longer-term uptrend filter, so the strategy only buys dips inside an established uptrend, not every stretched move regardless of the bigger picture.
Mean reversion tends to have the opposite win/loss shape to trend following: a higher win rate, with smaller, more frequent wins, and the occasional large loss when the "snap back" doesn't happen.
Educational content, not investment advice. zengtrade is paper-first and non-custodial.