What is mean reversion in gold trading?

Trading the return of XAU price to an anchor of value — typically session VWAP or the 20-period EMA — after it has stretched away from it, usually measured as two or more multiples of the 14-period ATR.

Does mean reversion work on XAUUSD?

On rotational days it works well because gold overshoots intraday and returns to VWAP repeatedly. On trend days it fails badly, so the regime test comes before the entry trigger, not after.

What anchor should I use for gold mean reversion?

Session VWAP is the most reliable intraday anchor on XAUUSD because it reflects transacted volume. The 20-period EMA on the 15-minute chart and the mid-point of the developing daily range are workable alternatives.

Gold Mean Reversion Strategy (XAU) Explained

Gold mean reversion fades stretched XAU moves back to an anchor of value — session VWAP, the 20-period EMA on the 15-minute chart, or the developing daily range mid-point.

Stretch must be normalised to volatility: distance from the anchor of 2.0 to 2.5 times the 14-period ATR is where reversion attempts on XAUUSD start to have a workable base rate, while under 1.5 ATR does not cover the spread.

The regime test comes first — rotational days with repeated VWAP crossings are tradable, trend days with a broken prior day range and one-directional VWAP separation are not.