Benford's Law: Detect Crypto Manipulation

A wild video today, one that goes deep into a mathematical pattern that repeats itself throughout the universe (no, not talking about the Fibonacci sequence). Could deviations from Benford's law tell us when a cryptocurrency is being manipulated? We shall see...
Benford's Law: en.wikipedia.o...
The documentary I referenced is here: www.netflix.co...
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bitcointrading...
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Disclaimer: The content covered in this video is NOT investment advice and I am not a financial advisor. The material covered within these videos is for educational purposes only. Always do your own research and only invest based on your own findings and personal judgment. Happy Trading!

[@Pipanpat]

You are one of the few youtubers i don´t watch in 1.5 speed . Thank you for your content! ❤️

[@bitcointradingchallenge3861]

Glad to hear it!

[@danielchristopher7273]

thats hysterical how do you do that?

[@kdburner7356]

@@danielchristopher7273 he’s not alone😅

[@tobischindler]

I thought about this a few months ago, but couldnt find any other person, who tried to implement Benfords Law to the market - i´m glad I found this video despite of I follow your channel for a while

[@goblinmoblin4869]

I heard Benford's law come up during discussion of ballot count issues. Cool to see this get talked about in life outside of trading.

[@gcoffey223]

All Benfords law showed us during the election is something unnatural happened...

[@kskufan]

Yeah when I watched that Netflix episode of connected I was blown a way! There is a video of someone doing Benfords law with the Pennsylvania vote count in 2020

[@yeliangarcia4623]

The trick and figuring out whether the deviation is statistically significant and the degree of autocorrelation in the rate of chage of the deviation

[@jorgemariotoro3608]

Thank you for recommending us something worth to Netflix tonight. I was so sticked to the crypto prices...

[@Philson]

Ok cool. But so what?

[@faenorsjewel5618]

would it maybe be best to only trade the timeframes that match up with Benfords law? as other timeframes aren't following the law properly... example : why trade the 1hr that deviates from the law when the 15m is following it better.... looking for sl/tp zones within a timeframe that synch with the law might be more beneficial than one that is out of whack with it

[@user-nn7mg3bp4u]

timeframe depends on the instrument you choose, i found that most of the time the 4h is the top profitable

[@faenorsjewel5618]

how can you see the contrary in a made up scenario? the 1hr and 15min TF mentioned in my comment were examples pulled out of nowhere, not referencing any chart in particular.... so the only data in my example is 1hr deviates, 15 min is following the law... in my example there are no candlesticks, or price data, just 1hr/ A = deviates from the law 15 min/ B = follows the law. would it be better to trade A or B?

[@launderable]

pump and dump work is detected?

[@OnlyWayOutIsThrough]

Fascinating stuff... I took a look at some of the popular cryptos and it pretty much confirmed my thoughts on which ones were prone to manipulation... Doge was a good example of one that deviates dramatically from Benford's Law

[@ohmynester]

How were able to do that? Would you care to explain?

[@OnlyWayOutIsThrough]

@@ohmynester on tradingview, there's a tool that charts the benford's law statistical deviation pattern.

[@princessisland333]

thanks for making this content dude. you're very intelligent and this is some of the first content I've found in this space that really gets deep into the manipulation of the crypto market, which is what i'm struggling with as i try to improve my trades. i've been searching for a good source on the matter rather than more price action or indicator advice and after watching a few of your videos i'm confident that i have a lot to learn from you. please keep making content like this

[@couldstrife4383]

So hence this would mean, that a chart that is following benfords law is more likely to move in a more natural and smoother way? I think this also varies if there is an accumulation phase, with usually low volumes, than when the price goes up and market makers start playing dirty

[@bitcointradingchallenge3861]

read these two articles: blog.bitmex.com/benfords-law-cryptocurrency-trading-data/ jheusser.github.io/2014/04/18/benfords-law.html

[@hdfailure]

Glad to see that there is a law that confirms my suspicions.

[@gcoffey223]

It's a law and your suspicious mind did not fail you.

[@atlantiscolors4491]

Which site or crypto exchange do I have to use in order to use benford's law indicator? Plz let me know

[@philipp59477]

Whats the name of the website that you are using in the video? I am new in the whole crypto game so idk all those websites that you are using. Thanks! and great video btw :D

[@lazgkhn]

We all know that crypto is manipulated. But how can we use this to our advantage when trading?

[@rafaelsemnome]

Why do you think it work? That's key to understand what kind of deviation should be considered acceptable for this type of metric.

[@dejvamk4119]

You should see the ICP / USDT on Binance and see what is out of order LOL with Benford's low.... Great video BTW

[@detrockcity3]

I mean, that's not even a natural market flow at all bc it's venture capital insta-dumping upon listing.

[@cutback443]

How would you define a "massive deviation"? Cool video -thanks man

[@bitcointradingchallenge3861]

A deviation that is more extreme than other deviations of similar assets. For example, if you are on the 15m timeframe and each crypto has only around a 2-3% deviation from Benford's Law and then you notice a crypto that deviates a wild 10% from the law on 1's or other digits, then that is an important deviation.

[@DrawWithBrian]

I came back to this video just to thank you bro! Atleast I am comfident to trade if i know that they don't manipulate the coin. I discover that XRPUSDTPerp has the worst deviation in 1 min. that is why the candles are with long wicks.

[@donavanreed5137]

Hello, thank you for the quality content. Might I ask which indicators you are using specifically to get the visual of the red & blue lines? I am using Binance and cannot find Benford's law in indicator search, do you mind helping me out and giving me some advice about this? I understand that this is not financial advise however, I would really appriciate information from a person that is not like all the other "educational" channels out there. :)

[@ncheese0703]

I have a question. if I look at a chart on a weekly basis and sometimes on a month basis then I see for every crypto currency that there is a center in the chart. if you cut the graph in half at this point and then reverse the rising line and stretch it out, it is identical to the falling half, only the angle is different and the rising part has shrunk. With this outcome, I can only say that all crypto is manipulated with software (AI) and everyone buys cryptocurrency that is in reality 25/30 percent more expensive than the real value.

[@dhanatsudadech7105]

Hey, this is my first time watching your video. And I have to say that I thought the same as you after watching Connected on Netflix. As how to apply to trading, I think there are many ways to apply to strategy too, such as setting the 1,2,3 %change to be take profit level and leave the other %changes to be a stop level or to change the direction. Since we have more chance to hit 1,2,3 level than others then we have to find the way to minimize a few losses. Just random thought. And I think there are more of math's rule that are interesting to look at and apply to trading too.

[@dhanatsudadech7105]

Oh, and maybe if we trading on grid. It is an interesting idea too place orders according to this law. Just random thought again.

[@gcoffey223]

This guy is SUPER informative. When I purged my subscriptions I spent weeks trying to find it again. So glad I found it. True story

[@farceadentus]

Can it be used in the context of a trading strategy?

[@joshuaandree9007]

What program are you using to evaluate this data set?

[@joshuaandree9007]

This model could be used for predictive analysis.

[@gcoffey223]

I don't chime in often but I really enjoy your channel. I have learned a lot and wish I was on your trading level. Best to ya good sir.

[@launderable]

how to find benford in the trade wiev

[@thecrumbsnatch]

good tool , just confirms my belief that the entire market is manulitaped always

[@lostmarxbro]

Great video would like to see how this theory could be used to help in trading

[@freebitcoingiveaway119]

benfords law is BTC chart upside down

[@MrHarrilasagna]

This is really cool... 🤜🤛

[@Nightman2152]

You're a cool guy

[@WorshipDaKing]

your great, thank you

[@user-ef9ow4mh8l]

show, how it can be applied?

[@couldstrife4383]

Somehow my tradingview does not show me the benfords law indicator option. Do I make sth wrong?

[@bitcointradingchallenge3861]

click indicators, go to public library, type in benford.

[@CarolineAWelde]

@@bitcointradingchallenge3861 i cant see it either.

[@bitcointradingchallenge3861]

@@CarolineAWelde Ok, here is the direct link: www.tradingview.com/chart/BTCUSD/LbMJbqEo-Benford-s-Law/

[@user-nn7mg3bp4u]

did you find it?

[@couldstrife4383]

@@user-nn7mg3bp4u No

[@randomtv8550]

Is this indicator measuring price data or volume?

[@bitcointradingchallenge3861]

It measures the % price change per candlestick. So if you use a 5 minute timeframe, then it will parse the leading digit of the % change of each 5 minute interval.

[@randomtv8550]

@@bitcointradingchallenge3861 Cool! but it would be more helpful if this could measure the volume manipulation.

[@bitcointradingchallenge3861]

@@randomtv8550 I have something for that as well: developer.ibm.com/predictiveanalytics/2018/02/09/benfords-law-perfectly-describes-bitcoin-volume/#:~:text=Benford's%20Law%20is%20one%20of,a%20three%20and%20so%20on.

[@randomtv8550]

@@bitcointradingchallenge3861 Great! but then why FTX's volume monitor says that almost 70 to 80 percent of volume reported by exchanges are fake?

[@detrockcity3]

We know what's going on. The LINK team owns tons of LINK and they sell off a lot.

[@freebitcoingiveaway119]

look at 3x +1

[@Sinnicide]

Dogecoin>?

[@youtubevisitor7654]

What's the use of detecting Crypto Manipulation? Crypto is Manipulation. You just need to hone your skills of risk management and not expect a quick profit.

[@bitcointradingchallenge3861]

Well, your trading strategy and risk management should be quite different if you find that a coin is heavily manipulated. For my trading, I would adopt a completely different approach if I found a coin to be making market movements that were highly unnatural.

[@youtubevisitor7654]

@@bitcointradingchallenge3861 You are probably right. I only do the main coins (Btc and Eth and some more ) as all the others, especially at ICO are dumb psycho - volatile.

[@wisdomwithwit]

@@bitcointradingchallenge3861 I was thinking this as well. It would interesting to see if it was automated manipulation. How it varied from the natural progression of benfords law and if it is trackable in its variance.

[@lordsimpleton]

Awesome

[@ddljddlj704]

honestly i dont agree

[@DEV_XO]

amazinb

[@joshuaandree9007]

No man, this is a great way to detect pumps.

[@notarealhandle123]

Dude, you are crazy :) Benford's law isn't applicable here, because most professionals trade in a systemic manner, like using the same Fibonacci Retracement points, etc, which naturally generates declinations from the Benford's law that was written for actually random events, not ones based on systemic patterns.

[@user-nn7mg3bp4u]

so you claim that the market price isnt formed by random events?! you more crazy...