What do you all think about this probabilistic approach?
I have decided to make a probabilistic model which finds out weather you should buy a particular crypto or not. i have researched about crypto and found that three things are important and in those three things there are certain patterns which can be seen.
The first is Momentum of crypto(strong, neutral, weak), Fundamentals(how the company is growing(strong, neutral, weak), market(adverse, neutral, bullish)
so my agent see's the evidences and then based on the past data pull out the base rate as first belief distribution among 5 hidden states,
- strong upward trend
- weak upward trend
- sideways
- strong downward trend
- weak downward trend
so the probability will be distributed among these from base rate from past data. so thee base rate will work as prior and then based on the specific patterns the agent will go inside the data see the specifications and calculate the numbers among all of the hidden states, find the probability of each happening by applying bayes rule and then by seeing a certain threshold and based on the events it will decide what to do, buy or sell