MTF Mean Reversion Basic Settings Explained

Hey guys, it's Keith Allen. Since I got a number of questions on setups and settings on the MTF mean reversion indicator, I thought I'd crank out a quick video and really try and condense

it all out into into one quick uh explainer. So, when you first

explainer. So, when you first uh add the MTF mean reversion indicator to your chart, you're going to see that it is coming with a lot of stuff on it,

right? You see all these different

right? You see all these different channels. These actually represent the

channels. These actually represent the fib channels uh within the indicator here, right? And it also uh you'll

here, right? And it also uh you'll notice that when it's the default setting is a 6% deviation. That's kind

of high considering the volatility that we've had lately. Now, when we first started doing this, when we first developed this, we would run uh our USDT

trades at 3% deviation and we'd run the Bitcoin pairs at 6% deviation because of the difference in volatility. Now that

the market has evolved so much, you really do yourself a lot of good if you customize relative to what the volatility is in any given phase. Uh the way I like to

use it is I use multiple I set up bots at different deviations so that I can turn on and turn off my lower deviations if we have high um high volatility and

the high deviations. If those get hit, all the better, right? I put more money on the bigger deviations than I put on the smaller deviations. I'll take more trades on the smaller deviations than I do on the bigger deviations. Just that's

that's capital management for me. Um, so

the the first thing in terms of cleaning up the chart so you're not seeing all of this stuff, all you have to do is click away what you don't want to see.

Personally, I just want to see the top channel, the bottom channel, and the middle. This is mean right here in the

middle. This is mean right here in the middle. And you can, of course,

middle. And you can, of course, customize the colors any way you want.

So all you do, click them out. Click

them out. Simple as that. Just click

away what you don't want to see. It

doesn't change the performance in any way, shape, or form. All it does is clean up the view for you. I find that helpful. A lot of people like to um see

helpful. A lot of people like to um see all those little nuances. And when we first started trading it, um we would, you know, if price wasn't necessarily

hitting in that full range, we would we would trade the channels. Well, now that things have evolved and we have a much better understanding, I'm talking like six, seven years ago. Um, now that

things have evolved, we just set different deviations. Uh, and that seems

different deviations. Uh, and that seems to be very, very effective. So, this is a much cleaner view of the indicator.

Right now, I just have the top and bottom. And this is, like I said, the

bottom. And this is, like I said, the default was 6%.

So, you can see I have it added to my chart a bunch of different times. So,

I'm going to I'm going to show you what it looks like at different deviations.

This is 1 and a half%. pretty tight, but Bitcoin and ETH in particular haven't been super super volatile. So, that's

what makes this an effective setting. If

I wanted to see even more signals, if it if we were in just a straight up sideways chop, um I might even go as low as 1%. But that's going to increase the

as 1%. But that's going to increase the number of signals that you have. You

might be faced with more draw down. That

might be an issue on capital management for you. So, you really have to be

for you. So, you really have to be conscious of of of what you're doing and how many trades you're willing to take.

I do like the dollar cost averaging aspect here, though. I'll take all the trades and small positions and dollar

cost average my way in. So, that's 1% 2% 3% and just take right. So, nothing is hitting on 3% uh these days for uh this

particular asset. So, you'll notice if I

particular asset. So, you'll notice if I take out that 1%, uh, the 2% is kind of the sweet spot on what the low has been lately. So, let's

go back and and add in, right? Even that

one didn't quite trigger. And the reason it didn't trigger is it was just a super quick wick and it didn't close below uh below the line. Um, and you can add these different channels. So, when

you're setting up for a particular, like if you're going for a a broad range of assets and you're like going to do a basket of alts, then you might

do something like this to set up and and see where the sweet spot is on the range and then set up your bot to have however many, you know, a composite bot with however many assets you want in it. And

that way, you don't have to have a bot for each individual asset. I personally

I like the control and the nuance of just being able to select the assets I want and having control over each one.

So I do uh a separate bot for each asset. That's my preference. You do what

asset. That's my preference. You do what works for you. Um in terms of Bitcoin pairs, let's let's just take the same pair and we see that ETH USDT has been

trading in a in a you know one and a half to 2% deviation range. If we did it on a on a Bitcoin pair, uh, how would

that look?

It's been also not that not that volatile. So,

this is the this is 2% here. If we added it to 1%, we'd start seeing some signals. So, it

just depends on, you know, and of course, if you get in a period of big volatility, this 1% bot could start going nuts and drain all of my and burn through all my capital before I get to the deeper deviations. So, this is where

capital management and bot management becomes really, really critical. But now

you know how to clean up the chart, simplify the chart, so you don't need all of the uh all of the different deviations on your chart. And you can

find the range that any asset is is trading in by putting and you can put as many of these on. Like I have I have bots with deviations up to like 15% deviation. That's for like those big you

deviation. That's for like those big you know the big nasty black swan that comes then or I have those huge dips. I'm

going to take a bigger position on that.

I don't have the capital to do a hundred trades on that bot at at that deviation.

But I only want it on like you know the select stuff that I really want to accumulate. So, that's how I'm doing it.

accumulate. So, that's how I'm doing it.

I hope you find this helpful and you uh you do what works for you. Of course, if you have more questions, give me a shout. You know how to find me. Thanks,

shout. You know how to find me. Thanks,

guys. We appreciate the ongoing support.