Momentum Vs Mean Reversion

This problem practices a core market intuition that interviewers like to test, how investors think about trends, reversals, and what drives a trading signal. You need to understand the difference between following strength in prices and looking for situations where prices may have moved too far in one direction, because that distinction shows whether you can reason about market behavior rather than just define terminology. Interviewers ask this kind of question to see if you can explain a strategy clearly, connect it to investor psychology and price action, and distinguish between strategies that assume continuation and strategies that assume normalization.