GHX-04 — MEAN REVERSION

This model identifies when price has moved too far, too fast from its average value, then enters expecting a return to the mean. Uses statistical measures to define overextension.

• It first reads the hourly picture and stands aside completely when gold is running hard in one direction — a stretched trend is not an overreaction.
• It then measures how far price has stretched away from its reference average, judged against how widely gold has been trading recently, and requires that stretch to be genuinely unusual rather than merely large.
• It does not act on the stretch alone. It waits for a later completed 15-minute candle to recover back through the level where the stretch began, with real conviction in that candle rather than a single spike.
• The average it aims at is fixed at the moment the stretch is identified and never moves afterwards, so an average drifting toward a losing position cannot be mistaken for price reverting successfully.
• Every trade carries a stop beyond the extreme of the stretch, set before the order is sent, and the trade is only taken when enough room remains back to the fixed target to be worth that risk.
• It leaves early if price closes back beyond the original stretch, if the trade has made no progress after the first part of its life, or when its time limit or session cutoff arrives.
• If any condition is missing, it records a wait with the single reason that stopped it.

• Measures how far price has stretched from its reference average against how much gold has been moving lately.
• Waits for price to recover back through the level where the stretch began rather than guessing at a turn.
• Aims at the average as it stood when the stretch was identified, so a drifting average can never flatter a losing position.

The method itself is documented in full in Gold mean reversion. It explains the wider trading idea, its risks and the conditions that can invalidate it.

Works well in ranging or mean-reverting markets. Excels when price makes sharp moves on low-quality catalysts that tend to fade.

• Balanced, rangebound gold weeks with no dominant macro driver.
• Quiet hours, where gold often oscillates around a level.
• After a spike that overshot on thin liquidity and was immediately rejected.

Can experience large drawdowns if market is in a strong trend. Price can remain extended longer than expected, testing position limits.

• Trending markets — the stretch simply keeps growing, which is why a strong hourly trend blocks entry outright.
• Breakouts out of long compression.
• High-impact news, when the average is irrelevant for hours.

No model is right about gold all of the time. When available, it will act only while you leave it switched on, on an account you choose and within the limits you set.

• Risk per trade, as a percentage of the account or a cash amount.
• Daily loss limit — once hit, no new entries for the rest of the London trading day.
• Maximum open positions on gold at any one time.
• Sessions it may trade, and whether high-impact news blocks new entries.

Every order still passes the same pre-trade checks as a trade you place by hand. Reducing or closing risk is never blocked.

No demonstration trades published on this model yet. The record begins with its first closed forward-test trade.

No closed gold trades have been recorded for this model in that period.

Scope: XAUUSD only, closed trades only, grouped by London trading day, across Gold Hunts practice and real-money accounts. Cash outcomes are deliberately not published, because they depend on account size, lot size and leverage. Older rows do not always record whether the account was real or practice.

Mean Reversion trades a method Gold Hunts has already documented in full. These 7 pieces cover the rules, the sessions, the failure modes, the risk arithmetic and worked examples on XAUUSD.

• Gold mean reversion: the full method

  The institutional guide to XAUUSD mean reversion: VWAP and EMA anchors, stretch measured in ATR, rotational versus trend regimes, entry checklist, invalidation, target logic and two fully worked gold trades.

• THE HOURS THAT ACTUALLY ROTATE

  Hour-by-hour XAUUSD behaviour for mean reversion: why the Asian range and London midday drift favour a fade back to VWAP, why the London open and US data window do not, day-of-week effects and DST handling.

• WHEN GOLD MEAN REVERSION FAILS

  Why XAUUSD mean reversion fails: trend days that satisfy the stretch trigger, volume-backed excursions, VWAP repricing after data, insufficient stretch, averaging down and rollover false anchors.

• SIZING GOLD REVERSION TRADES

  Position sizing XAUUSD mean reversion on the 100-ounce contract: ATR-based stops beyond the excursion extreme, correlation risk across XAU crosses, daily loss caps, time stops and prop-firm constraints.

• THE MIND OF THE GOLD FADE

  The specific psychological failure modes of fading gold: catching the falling knife, averaging into a losing trend trade, refusing to accept a regime change, and the false comfort of being right eventually — each with a hard rule and a journal prompt.

• MAKING THE FADE MEASURABLE

  The fields, tags and screenshots that make XAUUSD mean reversion measurable: extension in dollars and ATR multiples, mean used, regime tag, edge-decay metrics by extension bucket and regime, and a Gold Hunts journal walkthrough.

• THREE GOLD MEAN-REVERSION TRADES, IN FULL

  Three fully annotated XAUUSD mean-reversion trades: a clean win fading a 2.4 ATR stretch back to VWAP, a valid loss that followed every rule, and a trade that should never have been taken on a trend day — with the anchor, extension size, entry, stop in dollars per ounce, target, lot size from a stated account and R outcome.

• Trend Exhaustion Fade — Fades a gold trend that is visibly running out of participation.
• VWAP Reversion — Trades the return to session fair value after a stretch away from it.

See all twenty gold models