trying to translate that fade-the-drop piece to crypto nights
so i read the strategy library writeup about buying stocks that dropped way under their average, the one that basically tells you upfront it usually fails. really liked that it didn't try to sell me the idea, it just showed the shape: small profit target, wider stop, nice looking win rate, ugly tail.
my problem is i trade crypto between like 1am and 6am my time and i keep wanting to steal this logic, but half the conditions don't map cleanly.
the daily volume filter makes sense in stocks because it keeps you out of illiquid junk. crypto is 24/7 so "day amount" for me at 3am is a totally different animal than the same number at 9pm. do people here rescale that to like a rolling 24h figure, or do you just use a per-session floor so you're not fading a move that only happened because nobody was awake?
second thing, the falling streak condition. in stocks a 20 bar run down feels like something. on a 1m crypto chart at night i see that constantly and most of the time it's just drift, not exhaustion. wondering if the honest version for me is a much longer streak, or dropping the streak entirely and only using the distance from the average.
and the part i keep chewing on: the article says the asymmetry is the honest shape of mean reversion. fine. but crypto tails at night are fatter than stock tails intraday, at least in what i've watched. so does the same 1.2 up / 2.0 down structure even survive, or do you have to widen the target too and accept a worse win rate to keep the math from eating you? feels like if you keep the small target and the fatter tail you just get run over slower.
not planning to run anything live yet, mostly logging what would have triggered and staring at it. curious if anyone has actually tried a night session version of this and what broke first.