Discussing the article: "Developing a Trading Strategy: The Triple Sine Mean Reversion Method"
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Check out the new article: Developing a Trading Strategy: The Triple Sine Mean Reversion Method.
This article introduces the Triple Sine Mean Reversion Method, a trading strategy built upon a new mathematical indicator — the Triple Sine Oscillator (TSO). The TSO is derived from the sine cube function, which oscillates between –1 and +1, making it suitable for identifying overbought and oversold market conditions. Overall, the study demonstrates how mathematical functions can be transformed into practical trading tools.
This function, being a higher-order transformation of the basic sine wave, preserves its oscillatory behavior but with more pronounced curvature around the zero line. Like the standard sine function, it oscillates between -1 and +1, but with smoother transitions near the peaks and sharper inflection points around zero. These characteristics make it ideal for designing a mean reversion-based signal, as it captures subtle shifts in momentum and a candidate for constructing an overbought/oversold trading signal.
The sine cube function thus serves as a powerful mechanism for smoothing out price fluctuations while retaining sensitivity to directional changes. When applied to scaled price inputs, it produces an indicator that highlights overbought and oversold regions — conditions that are essential for mean reversion strategies.
At this point, it is important to visualize the nature of the sine cube function to gain a clearer understanding of its behavior and how it can be applied within our trading framework. To achieve this, we plot the function over the range –2π to 2π.
Author: Daniel Opoku