Concept · example: ETH, week of 26 February 2018

Sample size

How many past weeks does a comparison actually rest on, and what does a thin sample hide?

In plain words

Sample size is the number of past observations behind a statistic. Comparing this week's return or volatility with history requires enough earlier weeks for the comparison to mean anything; with only a few, the reference point is unstable.

Why it matters

Statistics drawn from a thin sample swing sharply when one more week is added, so percentiles, averages and volume comparisons computed on a young market can mislead. A careful desk checks how many weeks of history underlie a ranking before treating it as normal or extreme.

In a real week: ETH, week of 26 February 2018

ETH in the week of 26 February 2018 returned 2.99% on dollar volume of 0.29 billion, but the data carried only 2 weeks of history, so the return percentile against history was left empty and the volume comparison against the prior 12 weeks was unavailable. The two stored prior weeks were 12.67% and -7.66%, a sample too thin to call this week ordinary.

A common mistake

Reading an empty percentile as an error. It is often an honest sign that the market has not existed long enough for a fair comparison.

Related ideas

percentilerolling windowbase rate

Research notes on real market weeks, not investment advice. Sources: Binance spot BTCUSDT and ETHUSDT 1-hour candles and USD-M perpetual funding rates; weekly figures computed by WSTiger.

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