Thread by @CosmonautC, //THREADQuick study on darth maul candles. (whipsaws)Are darth maul candles anything you [...]

//THREAD

Quick study on darth maul candles. (whipsaws)

Are darth maul candles anything you should factor into your trading or just another another faucet of noise in the market?

For those who don't know what a darth maul is it is essentially when price will go hard in one direction (say pump) in a short time and then retrace all the way back down and set a new local low.

(Order can also be reversed ofcourse)

Here is an example:

So what I did was after I'd gathered/collected/found a few darth mauls I recorded whether their up or down move occured first.

After this I plotted price 2 weeks before the darth maul and forward 4 weeks after the darth maul (1 month)

Here is what I got:

(Darth mauls that had their up move first are plotted in green, those with down move first are plotted in red. Before the black line is the price action 2 weeks BEFORE the darth maul occured. The orange line is the mean return of every scenario)

So it might be a bit messy. So let's split it up into different categories based on price action the 2 weeks before the darth maul.

We'll have 3 categories:

a). Bullish trend before darth maul
b). Bearish trend before darth maul
c). Sideways trend before darth maul

The first move of the darth maul didn't seem to affect future price over the mid-term whatsoever. The only thing that really gave any idea as to trend after the darth maul was the trend before the darth maul.

Which means...

Darth mauls don't have any significant impact on price

But, while darth mauls may not have had any impact on price there seems to be a discernable pattern.

When plotting at what time darth mauls occur you can see that a majority of them occur between 1PM and 4PM UTC.

What's interesting about this is that this is the exact time that the London market and the New York market overlap in trading hours:

The same time that we have the majority of the darth mauls is also when the most volume is being traded on avg which makes sense.

credit to @MarketsScience, this is from their free time of day report.

(First pic is a bit older, second one is last 100 days from today)

So it seems that while darth mauls are insignificant for price whoever is causing them is aiming to inflict maximum pain to as many market participants as possible which we can see from the timing of when they occur (US + EU trading session == when most traders are active)

Lastly I looked at Darth mauls over time, my data most likely isn't complete but the general trend seems to be that frequency of darth mauls increases and will keep on increasing over time having somewhat of an explosion in Q2 2020.

Now I'm curious does this mean that more nefarious market players are entering the game and are using darth mauls to shake up the market every once in a while? Or is it just coincidence that as time goes on the frequency of this pattern increases?

Curious what you guys think

Should've said this earlier but this is only on XBTUSD on BitMEX.

Also, very likely not every darth maul.

Part of data gathering was me using a script to find darth mauls + manual filtering and other part was me manually going through candlesticks to find darth mauls.

Lastly, s/o to Glim. This was the tweet that inspired this study: https://twitter.com/Glimmerycoin/status/1286309051081474048

https://twitter.com/Glimmerycoin/status/1286309051081474048

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