Quantification changes a common way of thinking:
❌ Beginner thinking
“Will BTC go up or down next?”
✅ Quantitative thinking
“After condition A appears, have the probability of future upside and the return distribution changed?”
For example:
BTC breaks above the highest price of the past 50 days.
We don’t guess:
“BTC will definitely go up!”
Instead, we ask:
After similar situations happened 500 times in history, what are the returns for the next 1/3/7/30 days, respectively?
That’s the starting point of quantitative thinking.
❌ Beginner thinking
“Will BTC go up or down next?”
✅ Quantitative thinking
“After condition A appears, have the probability of future upside and the return distribution changed?”
For example:
BTC breaks above the highest price of the past 50 days.
We don’t guess:
“BTC will definitely go up!”
Instead, we ask:
After similar situations happened 500 times in history, what are the returns for the next 1/3/7/30 days, respectively?
That’s the starting point of quantitative thinking.