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T-distribution

Market Update - RUT | BTCThis video looks at the underperformance of RUT compared to the rest of the markets including CRYPTOCAP:BTC where we could see a 50% drop as I compare it to 2021 fractals We first need to see a pump around $88k and then go from there TVC:RUT is clearly going through a Distribution phase that will Contract, and this is where we can see the rest of the markets follow through similar to Jan. 2025, and 2021 - 2022 fractal. Expect stocks like NASDAQ:NVDA to retrace back to the downside, but will see it holdup pretty well NASDAQ:TSLA on the other hand may see price fall back to its major Demand lvl as it has a few times already.
INDEX:BTCUSDShort
by Nathanl19
HOW-TO: Analyze Support, Resistance & Short-Term DirectionHOW-TO: Analyze Support, Resistance & Short-Term Direction Using Volume Scope Pro (1H Example) Introduction This HOW-TO explains how to use the Volume Scope Pro — Order Flow Volume Analysis indicator to identify support and resistance, interpret order-flow signals such as absorption and distribution, evaluate buyer/seller strength, and determine a short-term market bias on the 1-hour timeframe. 1 — Chart Settings & Data Inputs • Main timeframe: 1H • LTF (Low-Timeframe data): 15-second volume blocks • LTF coverage: ~115 bars • Instrument: MES1! (CME Micro E-mini S&P 500) This setup provides a high-resolution view of order flow behind each hourly candle by aggregating ultra-low timeframe volume behavior. 2 — Buy & Sell Volume Behavior BUY Side: • Buy Current Amount ≈ 18.539K • 20-period Buy Average ≈ 54.044K → Buyers are significantly below their normal activity level. → Interpretation: Buyers are NOT supporting current price levels. SELL Side: • Sell Current Amount ≈ 17.073K • 20-period Sell Average ≈ 50.857K → Sellers are also below average, but buyer weakness is far more pronounced. Summary: In higher timeframes like 1H, lack of buyer activity is often more important than strong selling. Here, buyers are too weak to create a sustained bottom. 3 — Trend Angle Convergence & Divergence (Trend θ) BUY: • Price vs Buy Volume (3 and 20 periods) = Divergent → Price attempts to hold or bounce are NOT backed by buyer aggression. SELL: • Price vs Sell Volume (3-period) = Convergent → Short-term movement is driven by sellers, strengthening the bearish bias. 4 — Delta Analysis • Current Delta ≈ +1.46K • Global Delta (100 candles): – Positive Δ Sum ≈ 273.812K – Negative Δ Sum ≈ 225.671K Interpretation: Although short-term delta is positive and long-term delta slightly favors buyers, the price structure does NOT reflect bullish dominance. This type of delta behavior often indicates absorption rather than a trend shift — meaning buyers are active but ineffective at moving price. 5 — Support & Resistance Zones (SR Engine) Volume Scope Pro identifies two main zones: • Resistance Zone: 6880.75 ~ 6885.25 • Support Zone: 6707.75 ~ 6766.75 Current Position: Price is holding inside the upper boundary of the Support Zone. There was a minor bounce, but the reaction lacked strength and failed to break structural highs. 6 — Order-Flow Overlay Signals (OB / Distribution / Absorption) • Multiple OB and Distribution labels appear near upper structure → clear signs of supply, selling pressure, and exhaustion at highs. • OS and ABS signals at support did not result in meaningful continuation → weak follow-through from buyers. Combined with weak buy volume, the market shows bearish intent. 7 — Short-Term Projection Given: ✓ Weak buy volume compared to averages ✓ Sellers showing short-term dominance ✓ Converging sell-side angles ✓ Price reacting weakly to support ✓ Strong supply clusters above ✓ Delta showing ineffective buying → Short-term bearish continuation is the more probable scenario. As shown on the chart, the Short Position tool highlights: • Entry around the upper support boundary • Stop above the minor pullback high • Target near the lower support boundary This forms a clear, structured bearish setup with defined R:R. Disclaimer This publication is for educational purposes only. Volume Scope Pro does not guarantee profit or certainty of market direction. Traders must perform independent risk management and verification at all times.
CME_MINI:MES1!Short
by ata_sabanci
NDQ100 (15M) Bullish Analysis. (SMC)🧩 Market Context After a strong bearish move marked by a 1H Fair Value Gap (FVG), the market started to show institutional accumulation. A Change of Character (ChoCh) and a Break of Structure (BOS) confirm a shift to bullish momentum. The identified Order Block (OB) acts as a key mitigation point supported by a well-defined support zone. 💥 Entry Idea • Buy: 25,124 • Stop-Loss: 24,979 • Take-Profit: 25,530 • Risk/Reward: 1 : 2.6 After a Fake Out (bearish liquidity trap), price shows strong bullish reaction, indicating institutional intention to mitigate the OB and reach the Buy-Side Liquidity above. 📊 Technical Confirmations • The SMA starts to act as a dynamic support. • Rejection from the OB validates structure change. • The target (25,530) aligns with a distribution zone and liquidity pool, perfect for partial or full take-profit exits. 🧭 Conclusion Clean structure, strong institutional logic, and confluences in harmony. This setup illustrates the accumulation → mitigation → distribution sequence, where the market sweeps liquidity before expanding upward. A perfect example of professional market reading. 🚀 GOOD LUCK TRADERS 🦾🤓✌🏻
EIGHTCAP:NDQ100Long
by Fonseca87
A better alternative to Fibonacci grid🙏🏻 Fibonacci based grid is a great inspiration from the Universe, but imo ain’t the final product, and here it is: For traders Use these values above and put em into grid tool here, and you’ll end up with uniform distribution based grid: 1.6134612334371357 1.0196152422706632 0.7886751345948129 0.5 0.21132486540518708 -0.019615242270663247 -0.6134612334371357 Then about how to apply it, you can divide trading activity by analytical units, these are in turn are based on: ^^ by price ^^ by time ^^ by signed volume waves/volume delta Explanation If you’ve followed my latest work you know I’ve identified a way to combine higher order moments to construct natural data driven estimates of data’s extremums and “ever possible” values (I still got no idea how no1 Ever posted it anywhere over the last centuries). Now imagine you got only 2 input values: actual max and min (just like in Fibo grid, it ain’t knows nothing else). Given only these 2 values we can model stuff with uniform distribution that has precisely known values of standardized moments, so we end up with (and remember that uniform distro is symmetric around its mid, so all odd moments are zero): dev = 1 / math.sqrt(12) //standard deviation kurt = 1.8 //kurtosis (not excess ofc, the raw one) hkurt = 27 / 7 //hyperkurtosis, 6th moment, raw af as well 0.5 + dev * hkurt 0.5 + dev * kurt 0.5 + dev 0.5 0.5 - dev 0.5 - dev * kurt 0.5 - dev * hkurt And the resulting output of it u seen at the beginning of the post, notice how the edges *almost* match your lovely golden ratio. For wanderers: Now for the wanderers, creators etc etc etc We might have a new math constant in our hands. This can’t be a coincidence that limit levels (the ones at the edges) almost match the golden ratio . What if we find some kind of ‘almost’ uniform distro, where the limit levels would ‘exactly’ match the golden ratio? No problem - Beta distribution with parameters alpha = beta = (smth just a bit greater than 1). I solved it numerically in python with mpmath library (necessary for high precision stuff, default packages are gonna truncate too much and we work with gamma functions there, high powers, huge numbers). The following constant used as both parameters for Beta distribution provides us an almost uniform beautiful distro, with a minimal necessary deviation from uniform distro if u pls, just with a lil bit gently smoothed corners, and all connected to fibonacci sequence and golden ratio: 1.013156499304251804283836146883597463164059088989506487984660881392552993230097518061037104047261922219476043198153474114525730243848097530913517155085537693517359999905511951459927003624291626547046737804828112785002512650… … and it goes on and on. I called it Sagitta constant, because visually it creates that beautiful almost flat shape, the minimal natural curvature. And now if we put this as c in Beta(c, c) following the same levels construction method from before we get these levels: std = 0.28741741 K = 1.80628205 Hk = 3.88993123 0.5 + std * hk = 1.61803398 0.5 + std * k = 1.01915692 0.5 + std = 0.78741741 0.5 = 0.5 0.5 - std = 0.21258258 0.5 - std * k = -0.01915692 0.5 - std * hk = -0.61803398 Visuals, plots, graphics ^^ here you can see how our resulting distro & derivatives look like, kinda cute aye? Beta(c, c), where c is our constant Sagitta, actually might be a natural prior for Bayesian stuff, almost a boxcar windowing function for DSP so u gonna tame that famous spectral leakage, or a kernel for KDE, like u name it, every case when u need a uniform shape yet with slightly relaxed endpoints, you can use it in design and architecture. Go for it bros, test it in your R&D. Maybe some1 gonna use it to prove Riemann assumption conjecture , if u get dat milli send me 25% ima find a good use for it. ∞
COMEX:GC1!Education
by gorx1
Global E-Online | GLBE | Long at $34.55Global-e Online NASDAQ:GLBE provides a direct-to-consumer, cross-border e-commerce platform. It enables merchants to sell internationally and shoppers to buy globally, handling localization, payments, shipping, and logistics for worldwide transactions. Some companies NASDAQ:GLBE handles transactions for include Bath & Body Works, Victoria's Secret, SKIMS, Forever 21, and many more. Technical Analysis NASDAQ:GLBE is currently in a consolidation / "share accumulation" phase (i.e. trading sideways, overall), and the price is riding within my selected historical simple moving average. Often, the price will bounce along this area until momentum picks up and then it's off to the races to fill all the open price gaps above on the daily chart. The only concern I have is there is an open price gap on the daily chart near $21 that will likely get filled at some point. However, the earnings and revenue projections, if accurate, may delay this area from being filled for some time. Revenue and Earnings Growth into 2028 538% earnings-per-share growth expected between 2025 ($0.34) and 2028 ($2.17). 98% revenue growth projected between 2025 ($946 million) and 2028 ($1.87 billion). www.tradingview.com Health Extremely healthy, financially. Debt-to-Equity: 0x (can't beat that) Quick Ratio / Ability to Pay Today's Bills: 2.5x (no issues) Altman's Z-Score/Bankruptcy Risk: 11.6 (extremely low risk) Action The projected growth of NASDAQ:GLBE makes sense if there is continued rapid on-boarding of blue-chip clients. There is always the chance other companies, like Shopify, will partner, too. The company is also extremely financially healthy. It should be able to weather the storm in the near-term if there is a financial downturn. That is the only major risk I see here. If the economy flips globally, such companies, regardless of their performance, will get hit hard. However, if the growth is accurate, this is a no-brainer value/growth play. Time will tell.... thus, at $34.55, NASDAQ:GLBE is in a personal buy zone with near-term risks of a drop to $21 or below if the world economy flips. Targets into 2028 $50.00 (+44.7%) $60.00 (+73.7%)
NASDAQ:GLBELong
by WorthlessViews
DXY UpdateDXY — Reaction at 98.611 Distribution Zone The U.S. Dollar Index met firm resistance near 98.611, the same Bearish distribution area that capped momentum last week. Price remains inside a wide daily range but shows the first sign of cooling after a strong stretch higher. Below sits 98.143, the line that that changes chart bearish. Until then We are still good. Acceptance under that level would confirm a structure shift and open space for continued rotation lower. Upcoming jobless claims and Fed remarks may decide which side gains conviction. For now, this is a market balancing inventory — not trending, just redistributing. Trade confirmation, not anticipation. Key levels: 98.611 — Distribution cap 98.143 — Structural pivot — Institutional Logic. Modern Technology. Real Freedom.
CAPITALCOM:DXYLong
by CORE5DAN
S&P500 | Mild CrashRisk assets looking to sell off as the stock market tops out around $6,800. Current price action is only pulling back to test sellers again and we should see a continuation in selling until mid November and hopefully to see a Christmas rally to end the year off. Since price action awfully looks similar to '24 - '25 Fractal we could say the SPX will look to top next year February/March also considering we're on correction 4 in the Elliott Wave Theory. Would like to see the S&P bottom out around April - July months of next year at $5,600 if we can continue the bullish parallel trend.
OANDA:SPX500USDShort
by Nathanl19
SMART MONEY CONCEPT (SMC)📊 Bullish Analysis XAU/USD (15M) The market has shown a Change of Character (CHoCH) and respected the 1H Order Block (OB), creating a strong bullish impulse after mitigating the 1H Fair Value Gap (FVG). Following this move, a Break of Structure (BOS) has occurred, forming a New Higher High (HH), which confirms institutional intention to drive price higher and capture liquidity. 🔑 Projected Scenario • A possible Fake Out + Rejection around the 4,294 support zone. • Entry at 4,294 with Stop Loss at 4,261 (Risk/Reward ratio: 1:3). • First target (TP1) at 4,357. • Second target (TP2) at 4,400. 📌 Key Takeaways • Institutions are likely to manipulate liquidity before continuation. • Patience is required for confirmation at the rejection zone. • Scaling out profits at TP1 and TP2 gives both security and flexibility in trade management. ✨ Motivational Note Smart trading is not about predicting; it’s about preparing. Patience and discipline are the strongest weapons of a professional trader. 🚀. GOOD LUCK TRADERS ;)
CAPITALCOM:GOLDLong
by Fonseca87
ETHFIUSDT → Correction to support consolidation. Rally?BINANCE:ETHFIUSDT is correcting after updating its local maximum to 1.9382. The breakout of the 1.6775 zone is an attempt to start distribution after a long consolidation. Will the bulls hold this zone? Bitcoin is correcting after a false breakout of resistance. Against this backdrop, the entire cryptocurrency market is declining. However, the trend is bullish and the fundamental background is positive. The end of the correction may resume growth in the market. ETHFI on the daily timeframe is trying to move into a distribution phase after 5-6 months of consolidation. The trend is upward, and after breaking through resistance, a correction to the liquidity zone of 1.6775 is forming. A false breakdown, a change in market imbalance, and consolidation above 1.6780 could increase buyer interest, which in turn could lead to growth. Resistance levels: 1.8980, 1.9382 Support levels: 1.6775, 1.5343 The chart shows two key levels - 1.6775 and 1.5343. If the bulls hold their ground above the nearest level of 1.6775, this could lead to a rebound and growth, which in turn would confirm the continuation of the distribution phase. Otherwise, the market may test the POC zone at 1.5343, and liquidity capture may in turn trigger growth. Best regards, R. Linda!
Long
by RLinda
14
ALU | '21 Fractals | Price Projection Four different fractals with similar results. Q2 '21 price was in convergence and took off in July similarly to price action in '23 -'24. Except price was in divergence and stopped selling off in July and took off in November leaving the middle months for accumulation. After the expansion phase of the market in '24 price action got tossed into the distribution phase and price was bound to fall to these lows today. Looking at Q4 '23 Fractal it fits perfectly with what we saw early this year when price was distributing. Regardless what the news and fundamentals where saying price was able to repeat the same fractal by using the lows of '21. Q4 '24 Fractal is the most recent pattern that we can reference with todays price action to get a projected estimate. Current price action has also stopped selling in July and has been accumulating since then Would like to see price action close at ATHs going into the next year and into the next distribution phase.
Long
by Nathanl19
CCO | Distribution Pattern | FractalsLooking ahead we can see the next phase of price action falling into a distribution pattern Since correction wave 4 buyers took off but seem to be running out of steam. Eventually sellers will have to show what they can do after this trend breaks on a lower timeframe. Ideal move going forward would focus on short positions only with a local swing target of ~$96 since that was the last area of support Entries would be somewhere at the Head if using textbook patterns (HnS) or SMR A confirmation entry to be on the safe side would be after the Breakout Bar indicating a change in trend, and then waiting for the Distribution phase to kick in for more shorting opportunities. To add confluence to this trade idea we can look back at historical price action and find similar fractals that matches with current price movement At least two fractals are spotted with the same patterns that are building the same price structure we're in Elliott Impulse Wave, HnS Pattern, and Distribution Phases. If buyers are not interested in the local support lvl then liquidity at $76 will be next zone.
TSX:CCOShort
by Nathanl19
GOLD → Consolidation before continued growth FX:XAUUSD is undergoing a correction amid revised unemployment data, but this has not disrupted the overall technical situation. The market is still anticipating an aggressive reduction in interest rates... The price resumed its growth on Wednesday amid escalating geopolitical tensions and a weakening dollar ahead of the release of US inflation data (PPI). The price is correcting after a record high of $3675, but retains the potential for further growth. The escalation of the situation in Eastern Europe and the Middle East is increasing demand for safe assets. Expectations of Fed policy easing and a revision of employment data are weighing on the USD. PPI inflation data: Today's release may temporarily support the USD if the figures exceed forecasts, but the overall trend remains bearish for the dollar. PPI data is ahead, which may cause short-term volatility, but the long-term bullish trend remains intact. Support levels: 3640, 3628 Resistance levels: 3657, 3675 Technically, I expect to see a correction from local resistance to the 3645-3640 area, from which growth may continue. A breakout of 3657 could trigger a continuation of the momentum. Best regards, R. Linda!
FX:XAUUSDLong
by RLinda
25
UPS: From Delivering Packages to Delivering ValueAs you probably know by now, my strategy consists of finding cheap, deep-value, beaten-up, underdog stocks. This is the strategy I've been using for the last 5 years and that allows me to consistently outperform the S&P 500 by 2x to 3x every year. This does not guarantee that all my analyses are correct. But if I'm correct 6 or 7 times out of 10, then I'm a rich man! Now back to UPS! Over the last 3 years, the stock lost 64% of its value. But... did sales or income decline by the same account? Did margins decline? Did the company decrease its fleet by 60%? The answer to all these questions is NO, and this is why I think the stock is undervalued. Yeah, the tariff war and Amazon's slowing of the UPS agreement hurt sales, but these are transient. Overview UPS stock is down 64% since its ATH in 2022. P/S ratio is at 0.8, the lowest since 2009. P/E ratio is at 12.6, the lowest in the history of the stock The P/B ratio is at 4.58, the lowest since 2006. Dividend yield is at 7.8%. The CEO recently bought $1 million worth of UPS stock. This data gives us some clues. The stock is obviously underpriced, despite the fact that UPS is still one of the market leaders and the sales are stable. Financial performance Revenue: TTM $90.69 billion (+1.3% YoY); Revenue is improving, but still 10% down since the $100 billion in 2022. Profitability: Operating margin 9.4% (TTM), net margin 6.4%; EPS is now at $7.70, which is a similar level to what it was in 2020 and 2021, when the stock price was at $120. However, now the stock price is at $85. Balance Sheet: Debt $26 billion, debt-to-equity 1.45x, which is totally fine. Growth prospects UPS is cutting costs and jobs, targeting $3.5 billion in savings by 2026 via automation/AI (5-7% annual cost reduction). E-commerce will sustain long-term growth. The company is innovating with AI-improved routes, self-driving trucks, and drones. Technical Analysis The stock price is right above the $85 resistance level, which has been a support/resistance level since 2005. My target Considering the prospects, estimates, etc, I can see UPS going to $110 to $130 range in mid-2026, providing an upside of 30% to 40%. This level also aligns with the Fibonacci 0.236 level. If the stock continues to drop, I will simply average down. I don't think it can drop much more from here, and it will definitely not go bankrupt. I'm gonna invest approximately 1% of my wealth into this stock. Remember, I'm just sharing my journey and this is not financial advice! 😎
NYSE:UPSLong
by HenriqueCentieiro
Seller Strength Evident as Volume Peaks Fail to Propel Price HigAnalysis Context – This 1D chart uses the ATAI Volume Pressure Analyzer to study the A→B→C structure over the last 11 trading sessions. Segment C→B captures the advance (blue), while B→A captures the subsequent decline (red). Each bar’s up‑ and down‑volume is measured on a lower timeframe to detect buying and selling pressure. Volume ranking – Within this 11‑bar window, the indicator identifies the three largest buying (B1–B3) and selling (S1–S3) bars. Although the B1 bar shows the highest buying volume (~10.29 M units), its selling volume (~12.52 M) exceeds buying, resulting in a negative delta of ‑2.23 M. B2 is the only buyer bar with a positive delta (+1.87 M), while B3 again shows sellers in control (‑0.90 M). The seller bars S1–S3 all display net negative deltas, with S3 registering the heaviest selling (‑4.03 M). This pattern shows that peaks in buying volume are not producing higher closes and that sellers are consistently overwhelming buyers. Segment behaviour – The C→B segment (the rally) totals approximately +28.9 M up‑volume versus +36.7 M down‑volume, a net deficit of about ‑7.74 M. The subsequent decline (B→A) is even more one‑sided: +26.9 M up‑volume versus +41.4 M down‑volume, yielding a ‑14.5 M delta. The slopes of the segment trend lines reinforce this narrative: the rise from C to B has a shallow positive slope (~ 5° on the upper line), whereas the decline from B to A has a steeper negative slope (‑12° on the upper line). Sellers are pushing the price lower more aggressively than buyers previously pushed it higher. Price structure – Price currently trades near TRY 3.45,where resistance resides near the recent pivot highs around TRY 3.65 and TRY 3.73 (where B1 and S1 occur). As long as the price remains below these levels and buying peaks fail to translate into higher highs, the bearish bias remains. The red dashed line is not a fixed support; it dynamically connects the lows of the current C→A leg and updates with each new candle’s low. Its red colour confirms the bearish slope of this segment. As long as this guide remains red and slopes downward, the downtrend is intact. A meaningful sign of shifting momentum would be a flattening or reversal of this guide (e.g., changing colour) accompanied by a new B‑ranked bar that shows a positive delta. Risk management – This analysis is provided for educational purposes and does not constitute investment advice. Always consider your own risk tolerance and trading plan before entering a position.
BIST:CONSEShort
by ata_sabanci
EURAUD – Incoming Upthrust? Accumulation or Distribution? Chart Context: EURAUD recently completed a sharp markdown after a textbook rising channel break. What’s interesting now is that price has entered what looks like a potential box range between 1.7768 and 1.7885. I'm anticipating a possible upthrust move into the 1.788x zone — and what follows will reveal the true intent. Here’s the internal debate: Are we looking at reaccumulation — smart money trapping shorts before driving higher in line with broader money flow? Or is this a distribution — where the market builds a false sense of support before deeper downside? 🔍 What tips the scale for now is this: >The overall money flow direction (via volume patterns + structure) has leaned bullish, so I’m favoring accumulation with a shakeout scenario. Signs I’m watching: ✅ Absorption volume near the bottom of the range ✅ Higher lows inside the zone ✅ Fake breakout / upthrust into prior structure ❌ Failure to hold above 1.7855 could flip the bias short-term 📉 Expecting one more dip to test demand, followed by range tightening, and if buyers show up strong — the breakout can get explosive. What’s your take? Are we prepping for a markup or will this fakeout and roll over? "I go long or short as close as I can to the danger point, and if the danger becomes real, I close out and take a small loss"
Short
by theeOperator90
July 15 2025 -Sell Limit ActivatedGood day, folks! Just sharing another learning from my ideas here: EURUSD has been in a bearish structure since July 14, 2025 (1H Intraday). As you know, I always look for clear supply or demand validation before placing a sell or buy limit order. On the chart, you can see a valid supply zone that was generated on Monday. After that, I waited for a clear move during the Tuesday London and New York sessions, with the CPI news release acting as a catalyst for more volatility. The trade came to fruition during the New York session on Tuesday. (See chart for the complete breakdown of the movement and entry.) RR: 1:3 Another Wyckoff schematics and structure analysis.
Short
by glyrad
What Is T-Distribution in Trading? What Is T-Distribution in Trading? In the financial markets, understanding T-distribution in probability is a valuable skill. This statistical concept, crucial for small sample sizes, offers insights into market trends and risks. By grasping T-distribution, traders gain a powerful tool for evaluating strategies, risks, and portfolios. Let's delve into what T-distribution is and how it's effectively used in the realm of trading. Understanding T-Distribution The T-distribution in probability distribution plays a crucial role in trading, especially in situations where sample sizes are small. William Sealy Gosset first introduced it under the pseudonym "Student". This distribution resembles the normal distribution with its bell-shaped curve but has thicker tails, meaning it predicts more outcomes in the extreme ends than a normal distribution would. A key element of T-distribution is the concept of 'degrees of freedom', which essentially refers to the number of values in a calculation that are free to vary. It's usually the sample size minus one. The degrees of freedom affect the shape of the T-distribution; with fewer degrees of freedom, the distribution has heavier tails. As the degrees of freedom increase, the distribution starts to resemble the normal distribution more closely. This is particularly significant in trading when dealing with small data sets, where the T-distribution provides a more accurate estimation of probability and risk than the normal distribution. T-Distribution vs Normal Distribution T-distribution and normal distribution are foundational in statistical analysis, yet they serve different purposes. While both exhibit a bell-shaped curve, the T-distribution has thicker tails, implying a higher probability of extreme values. This makes it more suitable for small sample sizes or when the standard deviation is unknown. In contrast, the normal distribution, with its thinner tails, is ideal for larger sample sets where the standard deviation is known. Traders often use T-distribution for more accurate analysis in small-scale or uncertain data scenarios, while normal distribution is preferred for larger, more stable datasets, where extreme outcomes are less likely. Application in Trading In trading, T-distribution is a valuable tool for analysing financial data. It is primarily used in constructing confidence intervals and conducting hypothesis testing, which are essential for making informed trading decisions. For instance, a trader might use T-distribution to test the effectiveness of a new trading strategy. Suppose a trader has developed a strategy using the technical analysis tools and wants to understand its potential effectiveness compared to the general market performance. They would collect a sample of returns from this strategy over a period, say, 30 days. Given the small sample size, using T-distribution is appropriate here. The trader would then calculate the mean return of this sample and use T-distribution to create a confidence interval. This interval would provide a range within which the true mean return of the strategy is likely to lie, with a certain level of confidence. If this confidence interval shows a higher mean return than the market average, the trader might conclude that the strategy is potentially effective. However, it's important to note that this is an estimation and not a guarantee of future performance. How to Plug Probability and Normal Distribution in Your T-Calculation To use a T-calculator for integrating probability and normal distribution, follow these steps: - Input Degrees of Freedom: For T-distribution, calculate the degrees of freedom (sample size minus one). - Convert Z-Score to T-Value: If using normal distribution data, convert the Z-score (standard deviation units from the mean in a normal distribution) to a T-value using the formula: T = Z * (sqrt(n)), where 'n' is the sample size. - Enter T-Value: Input this T-value into the calculator. - Calculate Probability: The calculator will then output the probability, providing a statistical basis for trading decisions based on the T-distribution. Limitations and Considerations of T-Distribution While T-distribution is a powerful tool in trading analysis, it's important to recognise its limitations and considerations: - Sample Size Sensitivity: T-distribution is most effective with small sample sizes. As the sample size increases, it converges to a normal distribution, reducing its distinct utility. - Assumption of Normality: T-distribution assumes that the underlying data is approximately normally distributed. This may not hold true for all financial data sets, especially those with significant skewness or kurtosis. - Degrees of Freedom Complications: Misestimating degrees of freedom can lead to inaccurate results. It's crucial to calculate this correctly based on the sample data. - Outlier Sensitivity: T-distribution can be overly sensitive to outliers in the data, which can skew results. Advanced Applications of T-Distribution in Trading T-distribution extends beyond basic trading applications, playing a role in advanced financial analyses: - Risk Modelling: Utilised in constructing sophisticated risk models, helping traders assess the probability of extreme losses. - Algorithmic Trading: Integral in developing complex algorithms. - Portfolio Optimisation: Assists in optimising portfolios by estimating returns and risks of various assets. - Market Research: Used in advanced market research methodologies to analyse small sample behavioural studies. The Bottom Line The T-distribution is a powerful tool, offering nuanced insights in scenarios involving small sample sizes or uncertain standard deviations. Its ability to accommodate real-world data's quirks makes it invaluable for various trading applications, from strategy testing to risk assessment. However, understanding its limitations and proper application is crucial for accurate analysis. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
NASDAQ:TSLAEducation
by FXOpen
1
GBPUSD Sell Limit Activated June 17 2025This trade was taken today, (tuesday- june 17, 2025). Based on 1H timeframe Supply. I wait for London Session and check for possible liquidity sweep in 15 min and 5min timeframe. I noticed a CHOCH followed by tap in Supply zone of the schematics. I decide to create a sell limit order during New York Session to maximize the Risk to Reward Ratio. (Check the charts for detailed label and movement). 1:7RR Wyckoff schematics in 1H timeframe--> confluence of supply in lower timeframes for validity. RR:7 Another classic distribution. patience is the key :) #wyckoff #sell #supplyanddemand
Short
by glyrad
AUDUSD → Correction after a false breakout before growthFX:XAUUSD continues to rise amid uncertainty surrounding the dollar, which continues to consolidate. The currency pair is preparing to test resistance at 0.6537 The dollar is stuck in place due to market uncertainty. At the same time, the Australian dollar is strengthening and is ready to test the liquidity zone Within the current trend, the currency pair is heading towards resistance and the liquidity zone. We opened far away, and as we move towards the target, the potential for further growth may end. A false breakout of 0.6537 could trigger a correction Resistance levels: 0.6537 Support levels: 0.6509, 0.6479 A sharp move towards resistance without the possibility of further growth could cause a false breakout of 0.6537. Price consolidation below this level could trigger a correction before growth. Best regards, R. Linda!
Long
by RLinda
6