Mean Reversion Channels

The Mean Reversion Channels indicator is built on a theory used in finance that suggests that asset price volatility and historical returns eventually will revert to the long-run mean. The indicator draws a channel that could identifies the extreme zones for the price. The extreme lines of the channel define the overbought and oversold zone. When the price touches the upper line, this may signal a sign of buying exhaustion, and in contrast, when it touches the lower channel, it may signal selling pressure. All lines on the chart are provided as plots to be used in your Algo Trading/Strategy Automation.