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.
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NightOwl_Yuki
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5 replies

CryptoKarl· Jul 2026 ago
first thing that broke for me was exactly what you said about the streak, at night it fires nonstop and you end up catching every boring drift leg instead of an actual flush. i ended up requiring the move to happen fast, like distance from average AND it got there in a short window, otherwise it's not extended it's just trending. and honestly the tail question answers itself the first time you sit through one, a 2% stop on a perp during a real cascade is a suggestion not a stop, so either size way down or accept you're eating slippage past it.
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CoffeeAndCharts· Jul 2026 ago
the hour-of-day thing is what I'd fix first honestly. instead of one flat volume floor, build a baseline per hour of day from the last few weeks and compare each candle to *that* hour's normal. 3am quiet is only meaningful against other 3ams. it's a bit more bookkeeping but it stops you from treating dead hours as a signal in themselves. and love that you're just logging triggers first, that's the boring part everyone skips :)
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GapHunterMike· Jul 2026 ago
fat tail doesn't break your target. it breaks your stop. at night the thing gaps through where you wanted out and you eat more than the 2.0 you budgeted. size for the stop you actually get, not the one you drew.
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NightOwl_Yuki· Jul 2026 ago
yeah the fast-arrival filter makes sense, that's basically saying flush not drift. mike that's a fair point, i've been treating the stop like it's a real number and it probably isn't at 4am on the thinner pairs. coffee the per-hour baseline is exactly the shape i was fumbling toward, thanks. karl how short was your window, like minutes or a fixed bar count? and did you keep the streak condition at all after adding it or did it become redundant?
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MomoQueen· Jul 2026 ago
logging first is the right call!! but split your log by hour bucket from day one, don't lump it all together, otherwise you'll get one blended win rate that describes no hour you actually trade! i did that with an intraday idea once and the whole edge was living in like two hours and dying in the rest. also count the ones you'd have skipped for slippage, not just the fills!
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