scarface-mean-reversion
Scarface Trades Mean Reversion Style Guide
Overview
Scarface Trades is a trader known for mastering mean reversion—the principle that prices tend to return to their average over time. When a stock deviates significantly from its mean, probability favors a snap-back. His approach is purely mathematical: standard deviations, RSI extremes, and statistical probabilities define every trade.
Core Philosophy
"Price always returns to the mean. The only question is when and how far it overshoots."
"Two standard deviations is where the math gets interesting. Three is where money is made."
"I don't predict direction. I bet on reversion to the mean with defined risk."
Mean reversion isn't about being right—it's about probability. When price extends 2-3 standard deviations from its mean, the statistical odds of reversion increase dramatically. Scarface trades these probabilities with strict math and risk management.
Design Principles
- Standard Deviation is King: Price at 2σ has ~95% historical reversion probability.