A trader explains why following the market's auction flow beats pure mean-reversion. The core rule: look for long positions the day after a day that closed long, if the broader trend supports it. Check sentiment across day, week, and month timeframes before each trade.
If the previous day is long, I'm actually looking for longs the day after. I'm always going with the flow of what the auction's telling me. I'm very rarely looking for mean reversion strategies or something like that, unless it's a mean reversion strategy in a larger underlying trend. So I'm always looking at this sentiment. Where is this auction going from the day, the week, and the month? I'm always thinking about that for my next day trade. So you're looking at the bigger picture? Yeah, I do look at the bigger picture, but most of the time I'll drill down into yesterday's price action.
