Everyone trades using technical or fundamental analysis but quants use quantitative analysis. We base our decisions on EV instead of lines and drawings. Objective statistics, none of that subjective interpretation. Objective science and math everyone can verify. #quant #research #strategy #quantanalysis #trading

So I managed to catch this 22% move on T-Shriper Q with zero technical analyses. So what I did was quantitative analysis. So the idea is actually pretty simple. If we actually notice the last move on the last Wednesday was actually the sixth downstrict. If you count 1, 2, 3, 4, 5 and 6 and we managed to pick the bottom. The way to do this is pretty simple. We just got to download the historical data for the past 10 years for T-Shriper Q here and you can see this is actually almost a false standard deviation move, which means it's a very high likelihood of reverting. So we decided to enter that day, but before entry we did a bit more confirmation by calculating the expected value. So one question we have here is that on the sixth day, how do we know that there won't be another continuation and how do we know that the following day will be a recovery day, which actually did happen. But on the last Wednesday we don't know the future. So what we did was using a simple conditional probability and we just calculated the probability of the seventh day given the sixth day, which turns out to be 25%, which is very unlikely and it's more likely that the recovery happens than the continuation happening on the sixth day. So that being said, we also chartered out all the forward mean return if we were to hold the strategy and third that day and hold the strategy through this number of days and we find that the highest EV was about 15 to 20 days. We did the same for the seventh day entry if the seventh day happened and then we just have to calculate the EV by multiplying the probability of the seventh day by the forward return. But we don't really have to subtract the complement multiplied by the loss because there will always be zero and our EV for the sixth day entry will just be the main because the sixth day already happened so it's 100%. That said, we plotted a chart here so if you can see the blue line is actually the forward return, the mean return of the sixth day entry model and the orange line is the mean return, the forward mean return of the seventh day entry model and all of the blue dots are above the orange dot except for maybe this one which might be an anomaly. But if you hold it through 10 days onwards it's actually a higher EV than the seventh day model. So that being said the EV is higher for the sixth day entry model on the sixth day that's why we decided to enter right about there and then we just held it through. Right now we are actually up 22%. So this actually shows us that we don't need any technical analysis or fundamental analysis at all. All we did was quantitative analysis. We used statistics and math to inform us the exact probability of a move happening. Calculate the expected value and base all our decisions on EV.