Local Extrema Predictor (LEAP)

A machine learning-based market regime detection and mean reversion strategy

Mesirow Currency’s Mehryar Emambakhsh, Ph.D. presents Local Extrema Predictor (LEAP), a novel strategy for forecasting mean reversion in foreign exchange (FX) markets.

This paper presents the Local Extrema Predictor (LEAP), a novel strategy for forecasting mean reversion (MR) in foreign exchange (FX) markets. LEAP addresses key shortcomings of existing MR methodologies, including dependence on subjective labelling, rigid model structures, limited adaptability to the dynamic nature of FX markets, high-dimensional input spaces and narrow feature selection.

Contributors
Mehryar Emambakhsh

Ph.D.

Vice President, Senior Research Scientist
Currency

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