Earlier this month, I concluded a research project that involved weekly bar pattern statistics. I’ll be writing an $8 Research Report on this one soon, but the bottom line was that end-of-week momentum tends to be reversed during the following week.
This corresponds to a general conclusion that I reached from a lot of my earlier FX research; that the FX market has a tendency to revert to the mean over all time scales (as opposed to say, the equity markets which have a long term trending tendency). This makes sense because of the relative value nature of FX, and the fundamental economic pressures that are created when prices move in one direction for too long.
That’s my brief update for this week, so until next time…keep pipping up!
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