How To Trade Crypto Using Statistics & Probabilities (My Data-Driven Approach!)

[Maxpips]

Greetings everyone!

I'm starting this thread to share some insights into how I trade crypto using statistics and probabilities. It's a data-driven approach I've found to be really effective and removes much of the subjectivity that comes with technical analysis.

I'm hoping it can help some of you too!

Here’s what I’ll be sharing over the next few days weeks:

•   How to set stops using the historical Open – Low/Open – High Range.
•   How to take profits using the historical Open – High (Bull Days) Open – Low (Bear Days).
•   How to fade consecutive streaks of days/hour (with frequency & probability tables).
•   The probability price will rise or fall X number of Pips on bullish/bearish days (Table).
•   Whether large % rises & declines are more/less likely to result in further rises/declines.
•   Pin Bar probabilities.

I'm happy to verify any data and probabilities – I have over 10GB of files (not all crypto-related) to share via chat or email.

I'll also be uploading some additional data to debunk certain technical analysis concepts, so we know for sure what does/doesn't work.


Expect more data, images, and tables in the coming days/weeks.

Feel free to ask any questions or leave comments!

Cheers,

Max.


READ ME (Will Update Over Time!)


NOTE: Any time you hear "Occurences", that's the number of times the something happend (or occurred) in the data. Higher occurences make the statistics and probabilities more accurate, however, a low number of occurrences can still indicates a rare event, which can be exploited for informatiion and profits (like consecutive daily/hourly streaks!).

Just a quick reminder, in case anyone wasn't 100% sure.

[Maxpips]

Here's the first Data-Drop Guys....[/center]






What Does The Data Show?[/center]


Key:

Higher High = HH
Higher Low = HL
Lower High = LH
Lower Low = LL

(I promise this won't get too confusing

The tables above show the probability of 1-hour candlesticks creating new HH/HL
(during bullish candles) or LL/LH (during bearish candles) compared to the
previous 1-hour candles own highs and lows.


Specifically, the data shows:[/b]

•   The number of times a HH/HL & LL/LH occurred on every 1-hour candle (from 2017 - 2023)
•   The frequency of candles with HH/LL occurrences relative to the total number of bullish and bearish candlesticks.
•   The probability of a high/low forming, calculated as a percentage of the total bullish or bearish hours, respectively.


Key Takeaways:

1) ALL 1-Hour BULL candles = 71.71% chance of LOW forming higher than the previous candle low.
2) ALL 1-Hour BEAR candle = 70.51% chance of HIGH forming Lower than the previous candles high.

Use these probabilities to help set stop loss orders!

Say you see swift rise on the 1-hour timeframe (or lower) and decide to buy to capture the momentum.
Rather than place a large stop using technical analysis (which is very subjective), you can place the stop
a few pips under the previous hours low and then trail it up whenever a new hour begins!

All bullish 1-hour candles hold a 71.71% chance of forming a LOW higher than the
previous hours low – whether that candle closed bullish OR bearish!

Why this works:

•   Data shows 71.71% of bullish 1-hour candles form a low higher than the previous hour's low.
•   This means your stop has a high probability of staying untouched, even if there's a minor pullback.

And don't forget: ALL losses are reduced compared to using standard TA levels (S&R/FIBS/MA's Etc)!

Your stop sits closer to the current price action, reducing risk and improving profit
taking (if you decide to trail the stop!)


I'll get some more stuff up in the coming days...

Ask me if ya need help!