A Decade of Trading Mistakes in One Episode

A deep dive into a decade of trading mistakes, crypto competitions, and market lessons with insights from Kraken Pro.

Key Takeaways

Trading competitions often have fewer participants than expected, creating opportunities for savvy traders.
Early crypto trading was heavily influenced by BTC-denominated contracts, which shaped risk and reward dynamics.
Leverage and margin trading can lead to significant gains but also substantial losses if not managed carefully.
Trader psychology and emotional control are critical to long-term success in volatile markets.
Adapting to market structure changes and learning from past mistakes is essential for survival and growth.

What the video covers

Discussion on the overrated nature of trading competitions and their low participation rates despite promotional efforts.
Analysis of perpetual futures trading and the challenges faced by early crypto traders on platforms like Bitmex.
Reflection on the evolution of crypto trading, including BTC-denominated contracts and the impact of market volatility.
Insights into trader psychology, common mistakes, and the importance of managing risk and execution.
Examination of the 2017 crypto market cycle and its lasting effects on trader behavior and strategies.
The role of leverage and margin in amplifying gains and losses, with anecdotes of high-risk trades.
The importance of understanding market structure and adapting to changes such as the shift to linear futures.
Personal reflections on trading survival, mental math with BTC values, and the emotional toll of losses.
Promotion and endorsement of Kraken Pro’s current trading competition on gold and silver perpetual contracts.
Encouragement for traders to learn from past mistakes and maintain discipline in volatile markets.

Chapters

Why are trading competitions considered overrated according to the video?

The video explains that trading competitions are often less populated than expected, making them less effective as promotional tools but advantageous for traders who participate due to higher odds of winning.

What role did Bitmex play in early crypto trading?

Bitmex was a key platform for early crypto traders, especially for BTC-denominated perpetual futures, which shaped many traders' experiences with leverage, volatility, and risk management.

What are some common mistakes traders make based on the discussion?

Common mistakes include poor risk management, emotional trading, misunderstanding leverage effects, and failing to adapt to changing market structures.

Full Transcript — Download SRT & Markdown

Speaker A

Hello and welcome to another episode of Casual Friday. I'm here with the Duck. As always, this show is brought to you by Kraken Pro. We've got quite an, I think, advantageous promotion to share in this case. Don, I don't know how you feel about this. But usual shills aside,

Speaker A

Cred: trading competitions are both vastly overrated. Because it's what every single social media team Cred: reaches for and product team. It makes my eyes roll to the back of my head. But as a user, Cred: let's just say, sometimes these competitions are less populated than you think they would be.

Speaker A

Trading competitions are both vastly overrated because it's what every single social media team reaches for and product team. It makes my eyes roll to the back of my head. But as a user,

Speaker A

Cred: size account grinds, you can just look for any exchanges from tier one to tier three.

Speaker A

let's just say, sometimes these competitions are less populated than you think they would be.

Speaker A

Cred: Trade gold and silver perps for a share of 20,000 in USDG. It's a 30-day competition Cred: started a day or two ago, and it's just to trade their gold and silver perps. I think you can get Cred: a pretty decent stab at that prize pool if you care enough. Even with something like a very

Speaker A

Yes, yeah, yeah, not yet, not yet. Yeah, it's two weeks, I think, and then they close down. Yeah, Cryptopia, good stuff. Yeah, probably. Yeah, there's some genius level stuff,

Speaker A

Cred: The TLDR for these types of promos is they're probably not as popular as the product people Cred: working at the company Cred: want them to be, which sucks for them. But for you as the trader, it's actually quite advantageous

Speaker A

right? That's like the real sort of alpha there. It's one of those like small to medium

Speaker A

Cred: What point is the show surviving if it disappears for a month at a time, anyway, Cred: if this is survival, what is death? And for that I say, fuck you. I don't have a good response Cred: anyway. Thank you to Kraken Pro for supporting the show. Check out this

Speaker A

size account grinds. You can just look for any exchanges from tier one to tier three.

Speaker A

Cred: The chart I've actually started with is Bitcoin Historical Volatility Index from the now defunct Cred: RIP BitMex, their BVOL index? Not yet. There's still time. I think Bitmex, for both of us, holds Cred: a sort of special place in our heart, right? And the reason for that is we all sort of started

Speaker A

Running these sorts of competitions and a lot of the time, the actual pool of participants is

Speaker A

Cred: And the way we sort of and traded as a misnomer for whatever the fuck we were doing. But, you know, Cred: we would trade on primarily what Bittrex, Poloniex, those types of exchanges. You would Cred: trade Alt BTC pairs or the whole up in U.S. cryptopia. Yeah, still waiting there, you would

Speaker A

pretty tiny. And so your odds of winning, even if you participate to some extent, are higher than

Speaker A

Cred: USD pairs. And so if you bought a altcoin and it was down against Bitcoin on its Alt BTC pair Cred: because bitcoin went up. You would say that you're up in USD even though you haven't made Cred: more BTC and you're underperforming. Which was kind of the point, and that sort of established

Speaker A

they would ordinarily be, and that's what's going on at Kraken Pro. They've got the bullion rush.

Speaker A

Cred: But at the time, if you were to speak to any reasonable person, because of the way the market Cred: structure was set up, where everything was denominated in BTC. And that's kind of, realistically, Cred: the only way you know that's your benchmark, that's what you would use to cash out, etc.

Speaker A

Trade gold and silver perps for a share of 20,000 in USDG. It's a 30-day competition

Speaker A

Cred: the, you know, those exchanges basically went to zero in terms of volume, all the coins there went Cred: to zero, etc. Then there was a question of what the fuck do I trade right? And naturally, the Cred: answer for low sophistication first market cycle crypto altcoin punters was perpetual futures with

Speaker A

started a day or two ago, and it's just to trade their gold and silver perps. I think you can get

Speaker A

Cred: me what a funding rate was, I don't think I'd even guess an answer, I just wouldn't have any idea.

Speaker A

a pretty decent stab at that prize pool if you care enough. Even with something like a very

Speaker A

Cred: that created this 2017 generation of traders? Some would say that we're still suffering from Cred: that today. I think those people are correct, objectively speaking, just to sort of get across.

Speaker A

straightforward strategy and any, you know, you don't have to do wild swings and stuff like that.

Speaker A

Cred: to 100x, that would be 100x amplifying my returns. That is, I'm like, why is everyone not doing?

Speaker A

The TLDR for these types of promos is they're probably not as popular as the product people

Speaker A

Cred: this, these people are insane. And that was my first probably longer than a month of trading Cred: on Bitmex. So yeah, the Bitmex meat grinder, with its low volatility, order submission error, Cred: terrible market regime accompanying. It was certainly a battleground where a lot of

Speaker A

working at the company

Speaker A

Cred: mentally know how much bitcoin you either made or lost. Or, periodically, you know some big trades Cred: that you donated to the Bitmex Insurance fund. And then when BTC is over 100k, it makes the mental Cred: maths very easy and also very depressing. I've unfortunately gone through that exercise and it

Speaker A

want them to be, which sucks for them. But for you as the trader, it's actually quite advantageous

Speaker A

DonAlt: Oh yeah, I mean, those are my favorites, like the, I mean, the E. Yeah, Cred: also like it was a totally different class of perp trading because inverse contracts were the Cred: main thing there. So again, it's sort of denominated in BTC, which was a weird one. And then they had

Speaker A

and interesting. So that's at least one reason to check out Kraken Pro this week, and the link to

Speaker A

DonAlt: And given the contract got worth more. When prices went up, the number was like twice as much as I thought it was gonna be. Which made like a really, really good trade that I thought was like, already, really. Degen made it much worse because if it would have gone down, the contract would have lost in value as well. So I was risking more than I knew in an already over risk trade and then I got. I got lucky, got bailed out.

Speaker A

this will be in the description. And also, so we don't get fired, right? There's a nice little

Speaker A

DonAlt: the good old, the good old eve trade down the still like. This was one of the trades I had the best day of the year regarding the Bitmex Cred: house. Yeah, yeah, yeah, no, that's funny and that's the thing right. You would get like,

Speaker A

byproduct here of the show gets to survive, although I can already hear the objections.

Speaker A

DonAlt: Yeah, DonAlt: yeah, it happened in like la la, la la, DonAlt: that happened in like, la la, la la.

Speaker A

What point is the show surviving if it disappears for a month at a time, anyway?

Speaker A

Cred: Especially to the downside. The convexity was insane. Because these were BTC denominated in Cred: BTC margin contracts, so people were using BTC to long BTC, and so you can imagine when BTC would Cred: go down. People's positions were less collateralised and deteriorating at the same time as prices going

Speaker A

If this is survival, what is death? And for that I say, fuck you. I don't have a good response

Speaker A

Cred: Bart-type price action that we refer to now comes from. You just had the most sort of Cred: positional, directional market ever, all stacking, you know, leverage cubed. And one guy would sneeze Cred: and everyone else would end up shitting themselves, which is always fun. But yeah, good times, good

Speaker A

anyway. Thank you to Kraken Pro for supporting the show. Check out this

Speaker A

Cred: we're still there, still there, literally nothing has changed. So perhaps our absence, and I say, Cred: our, because it's obviously both of us, right. It wasn't just me. Our absence can be forgiven, Cred: given the context and market conditions. On that note,

Speaker A

Golden Silver Perps competition. Scope it out. There are probably fewer people there than you

Speaker A

Cred: blown up. Saylor, you know, increased his USD reserves, which is a hilarious term, right? When Cred: you dump BTC, yeah, it's like, No, sorry, I'm not dumping on your head, I'm rebalancing your portfolio.

Speaker A

think, and it's a good opportunity to also just sign up and support the show in general. Don.

Speaker A

Cred: bad news, bad correlations, Iran stuff, et cetera. Macro, like all the Fed, all this stuff is terrible, Cred: but BTC is still here. I'm generally sympathetic to those types of arguments, but it's sort of.

Speaker A

The chart I've actually started with is Bitcoin Historical Volatility Index from the now defunct

Speaker A

Cred: the case that, wow, things are actually pretty terrible. And if BTC manages to hold this Cred: hoo boy, will that be a signal? And it's like, Okay, well, it's been a couple of months now.

Speaker A

RIP BitMex, their BVOL index? Not yet. There's still time. I think Bitmex, for both of us, holds

Speaker A

Cred: it's good that we're absorbing this versus okay, well, we've had a lot of relative strength via lack Cred: of weakness, but no one's fucking buying this thing. And what does that mean DonAlt: relative terms? But also, like, now, the S&P is up infinite again and we're still at 65. Um, so I'd

Speaker A

a sort of special place in our heart, right? And the reason for that is we all sort of started

Speaker A

DonAlt: strength or weakness in the market right now. It's just a piece of shit. Um, and that's, I mean, that's DonAlt: fine sometimes, that's just how it is. And I think the moment it starts moving above 65 um, 65 6, the

Speaker A

off. At least this group and much of our cohort started off trading around 2017 in that bull market.

Speaker A

DonAlt: it's also, like you said, unwilling to go up when when the rest is strong. Um, so, yeah, I don't know, DonAlt: I. I don't necessarily think the the relative strength argument is the strongest anymore.

Speaker A

And the way we sort of and traded as a misnomer for whatever the fuck we were doing. But, you know,

Speaker A

Cred: Yeah, all very possible. Yeah, that monthly is basically 60k. Your good old cluster, the one.

Speaker A

we would trade on primarily what Bittrex, Poloniex, those types of exchanges. You would

Speaker A

DonAlt: maybe I'm just washed and mistaking, mistaking, um, information, um, as something that is just not there.

Speaker A

trade Alt BTC pairs or the whole up in U.S. Cryptopia. Yeah, still waiting there, you would

Speaker A

DonAlt: more excited about 45k for the longest time. Like when we're trading at 70, whatever, I was like, this DonAlt: would be so cool to buy at 45, uh, the like. With more and more time spent, I kind of feel like

Speaker A

trade Alt BTC pairs. There were no linear

Speaker A

Cred: that's been spoken about ad nauseam. I think the way I view this is that the sort of bet Cred: has changed to some extent where the bet used to be. You know, sellers run out of coins Cred: and number go up, and that's the sort of relative strength argument. I think it's sort of changing

Speaker A

USD perps or futures. It was either like, Oh, I'm tethered up, or you're long. Like every single

Speaker A

Cred: whatever else. Because I think that's the sort of the more intellectually honest read. When Cred: the market both fails to respond to upside and downside headlines, Cred: um, and just Cred: general is is a bit anemic and and non-responsive. Like if if there were latent buyers in the market

Speaker A

altcoin under the sun and the Up in USD meme comes from the fact that there were no native

Speaker A

Cred: hands and then it doesn't go up. And hey, it's actually been pinned in the same range for you Cred: two months or whatever. Um, I think you can still make the same argument in terms of what exposure

Speaker A

USD pairs. And so if you bought an altcoin and it was down against Bitcoin on its Alt BTC pair

Speaker A

DonAlt: Yeah, yes, yeah, yeah, I agree. There's one thing that I've been kind of looking at on the monthly.

Speaker A

because Bitcoin went up, you would say that you're up in USD even though you haven't made

Speaker A

Cred: this bet, uh, and then be like, Okay, well, you know, maybe I'll use options, or maybe I will just get Cred: like some perp exposure, or use this to rebalance my spot portfolio, whatever else. Uh, so, unless you

Speaker A

more BTC and you're underperforming. Which was kind of the point, and that sort of established

Speaker A

Cred: If volatility expands to the downside, you kind of have to buy it, you know, because, like, if that, if.

Speaker A

a very interesting culture in terms of how people view altcoins. Which is something that I think is

Speaker A

Cred: Um, and that's where you get into your Donald's deep dark fantasy 40k Cred: BTC Cred: area. And if you're not buying that, then I mean, why do you have this on your watch list?

Speaker A

something we lost, I think, in the linear futures perpification era, which had its own benefits.

Speaker A

Cred: whatever, whatever post-summer drift, um, but time for, you know, there'll be a move to ride.

Speaker A

But at the time, if you were to speak to any reasonable person, because of the way the market

Speaker A

Cred: slash, the one that's above the depressing cataclysmic levels. And then you've got a Cred: sort of intermediate trigger at 65k. Which would be the first weekly time frame evidence of Cred: anything being reclaimed. And I think the rest is a wash. To be completely honest with you,

Speaker A

structure was set up, where everything was denominated in BTC. And that's kind of, realistically,

Speaker A

DonAlt: Um, and that is like, you, you have that low in February 26, right? As in, like a couple months ago.

Speaker A

the only way you know that's your benchmark, that's what you would use to cash out, etc.

Speaker A

DonAlt: like covet and whatever, like wild price action. But we kind of had like the same thing where DonAlt: we had like a really, really obvious support in 6K, right? Like if you draw like your candle, um, DonAlt: from like 6, 6.3, 6.4, ish, like a support. That was our range low back then. Um, and you kind of look at

Speaker A

The prevailing wisdom among all the old heads and the participants at the time was. Altcoins exist

Speaker A

DonAlt: then went up, um. And that's kind of like the same ish formation, obviously disregarding the entire DonAlt: covet wick that we got. But um, it's kind of like the same formation that we're getting right now.

Speaker A

as a vehicle to make you more BTC, and that is obviously no longer the case. People don't view

Speaker A

DonAlt: wishful thinking. But at least it kind of reminds me of of how we traded back there on the closing DonAlt: basis. Um, I kind of like that setup generally when you wick into support and then you run back

Speaker A

sort of the meta, and then the way this ties back to Bitmex is. After everything crashed and died in

Speaker A

DonAlt: it. Uh, there's a chance that it comes back and does so later down the line and that's kind of what DonAlt: we've done. So now we just need like a little bit more upside to confirm all of that, and then it

Speaker A

the, you know, those exchanges basically went to zero in terms of volume, all the coins there went

Speaker A

DonAlt: Yeah, but price hasn't gone down, even though he has, which I find quite DonAlt: like people are. Every time he announces a sell, price goes up. After. Um, because people are like, oh DonAlt: yeah, like, less. Sailor, uh, he says, like, minimal amounts in comparison to what he's holding. Like,

Speaker A

to zero, etc. Then there was a question of what the fuck do I trade right? And naturally, the

Speaker A

DonAlt: handful of people left that kind of support. What he's been doing lately, yeah, I wish he wasn't like Cred: podcast tour, don't that? That'll fix everything. Um, yeah, I think, the well, Bitcoin, to be precise.

Speaker A

answer for low sophistication first market cycle crypto altcoin punters was perpetual futures with

Speaker A

DonAlt: Because it's just like that guy just seemed like to me. I look at it and I'm in the crypto space and DonAlt: it's just kind of. He just seems like a drugged up lunatic to me when I watch his stuff. And I'm

Speaker A

leverage. I mean, that is the natural transition, right from not knowing what the fuck you're doing

Speaker A

Cred: become like the institutional guys, you know? Uh, and all these wealth Franklin Templeton, all these Cred: like sort of wealth managers and legendary traders, um, who? who make a bit more of a reasonable sober Cred: case. Um, because other than that, you either have Michael Saylor, which, you know, res ipsa locator

Speaker A

on Bittrex on your phone. What you should then go do is highly leveraged perpetual futures. That no one

Speaker A

Cred: Uh, and like the hardcore maxi, so-called, you know, Austrian in Austria, Austrian School of Economics, Cred: pseudo-intellectualism, uh. So it's very much a narrow church in that regard. Um, I think the 6K Cred: is a very interesting one. Um, God, I remember how fucking terribly I traded the sort of other half

Speaker A

really understood at the time, and some would argue, still don't like. If you were to ask 2018

Speaker A

Cred: know if you remember that shit, but I was like, Oh, 10k is this big monthly resistance level? Oh my God.

Speaker A

me what a funding rate was, I don't think I'd even guess an answer, I just wouldn't have any idea.

Speaker A

Cred: being monthly resistance. I think I may still have been fucking bear pilled at that point. Um, but that Cred: sort of climb, those six months from wick to close to breakout and the crazy move that followed.

Speaker A

And this whole like index and last mark, you know, all these perp mechanics, even liquidations

Speaker A

Cred: I don't know how you remember that, period. HuMBle BRAG Yeah, yeah, man, yeah, dude, it was terrible.

Speaker A

and how leverage works, were completely unknown to the users at the time. And you sort of compound

Speaker A

DonAlt: Like, like, when you zoom out, I'm like, usually, usually, I'm on the right side of this, uh, this DonAlt: thing. Just like I've gotten. I've got lucky, I've got in it in a really good time. Um, and then got

Speaker A

absolutely abysmal market conditions into 2018, and you have what is the sort of mental asylum

Speaker A

DonAlt: buy some. It's just like, if if it goes to zero, like, Oh well, we're all um. And that worked out DonAlt: really well. But then, like, the recovery after, is, I think, in my opinion, the worst. I've traded crypto.

Speaker A

that created this 2017 generation of traders? Some would say that we're still suffering from

Speaker A

DonAlt: got to buy, um, on the way towards the end of the year, um. And then I was like, Okay, let's buy some DonAlt: like 14k. And I coped and was like, I think like this, this has to take like a little bit longer to

Speaker A

that today. I think those people are correct, objectively speaking, just to sort of get across.

Speaker A

DonAlt: whatsoever. Um, so, like, I would say that, like, that's legit. The worst trading I've done in my entire DonAlt: career. Um, in that move, DonAlt: which which is quite funny to look at. Yeah, like, like, when you look back at it, it seems

Speaker A

The level of sophistication. I remember. I used to think that if I would open a position with like,

Speaker A

DonAlt: Like such a clear move, it's not really, I guess. Like you look at the monthly chart, you're like, DonAlt: how the are you getting this wrong? Like this is so clear. But back then I was just like,

Speaker A

1x leverage or 2x. And then the second it would start going in my favor, I would move the slider

Speaker A

DonAlt: some DonAlt: like, it's so easy to get infected, um, and it's so easy to kind of like, just stick with it, even though DonAlt: the market is telling you otherwise. Um, and you can be right for a little bit, but you shouldn't

Speaker A

to 100x, that would be 100x amplifying my returns. That is, I'm like, why is everyone not doing?

Speaker A

DonAlt: back to being dead soon, and then it just never went back to being dead. Um, but yeah, DonAlt: kind of like that. Um, where we are right now, it's quite easy to be to be a doomer, same kind of like

Speaker A

Yeah, yeah, yeah, I have done that before, but I had a bunch of accounts so like. And that made it so that I just started losing track of how much I was losing. I did have like, like, Bitmex, I think, was like, not the best for me. Generally, trading wise, I don't think for anyone really

Speaker A

DonAlt: same way, I don't think it's gonna like, obviously, do like 10 to 60k again. We're DonAlt: way too high up for that to happen. But um, I would like like a um, a slow push into resistance DonAlt: and then like, a nice pop, that'd be nice. Um, and we are kind of setting up for it similarly. Um, it's

Speaker A

this, these people are insane. And that was my first probably longer than a month of trading

Speaker A

DonAlt: in 2020. I think, even though I don't think it's going to be a good thing, I think it's going to be.

Speaker A

on Bitmex. So yeah, the Bitmex meat grinder, with its low volatility, order submission error,

Speaker A

Cred: ideological in these conditions, uh, despite the price of, and again, in terms of how things have Cred: been done, uh, it is still a very sort of constrained story. From the stuff that's stuck around and then Cred: the stuff that you don't see, that hasn't stuck around. But extracted, you know, hundreds of millions

Speaker A

terrible market regime accompanying. It was certainly a battleground where a lot of

Speaker A

Cred: shape that we know it. Cred: Um, and the number of like, investable assets net net is what? Like 10 fewer than 10. um, Cred: 10 is very, 10 is generous. And realistically, you have like bitcoin, which is ETF institutional. Plus.

Speaker A

memories and mental scars and prescriptions

Speaker A

Cred: In terms of, like, grift, home of grifting, and you sort of work your way down the list. And a lot Cred: of the fundamental things are still very broken. Like, you know, if you were to look through Coin,

Speaker A

as a result were forged. So rip Bitmex, pour one out. I will never forgive you or myself for the

Speaker A

Cred: wrong. Um, and so that that kind of shit makes it very difficult. I also think the anecdote that you, Cred: I mean, it wasn't an anecdote, it's a painful recollection of history. Uh, and I also just like,

Speaker A

amount of BTC I lost on there. I don't know if you've done this exercise. Don of you sort of

Speaker A

Cred: I think that's a very interesting lesson. There there are a hundred percent large groups of people Cred: who are like, I will just buy. Whenever I see the headline that, you know, unintentionally or not, Cred: I will buy when I see the headline. That Bitcoin has made a new high. Um, and they kick the shit out

Speaker A

mentally know how much bitcoin you either made or lost. Or, periodically, you know some big trades

Speaker A

Cred: chilling, bro, yeah. So that's why, I think, at least in part, among many other reasons, just larping.

Speaker A

that you donated to the Bitmex Insurance fund. And then when BTC is over 100k, it makes the mental

Speaker A

Cred: then the market actually moving? What kind of mental state are you in, and what is your risk Cred: posture, and what kind of position does it put you into? To manage the volatility that comes after? And Cred: part of it is just like pure psychological slash, mental anchoring, right? Like, I remember buying the

Speaker A

maths very easy and also very depressing. I've unfortunately gone through that exercise and it

Speaker A

Cred: it starts going up, you feel some air start to repopulate your lungs. You're like, Okay, just get Cred: me out of this position, like, I'm sorry, like I'll never do that shit again. Is my entry resistance?

Speaker A

wasn't fun, but that's the TLDR there. R.I.P. Yeah, for sure,

Speaker A

Cred: rough to. It's certainly compared to someone who just buys the breakout and holds it, like, the Cred: trade management piece is very different. In hindsight, I wish I had a slightly more sort of Cred: abstracted and bigger picture understanding of, like, what the what market? And this is something

Speaker A

I did trade on this at the same time on BitFinex back in the day and that was much better. Which is, as in, like, not necessarily the trading environment, just the results of what happened. I think Bitmex, just offering too much leverage to people that haven't really done that before, wasn't necessarily the best for most people. Good times, though.

Speaker A

Cred: And so what that means is, I fucking hold. You know, you don't trade the four hour support resistance Cred: level if you're trading sort of monthly volatility. Expansion or super high time frame Vol. plus trend.

Speaker A

Oh yeah, I mean, those are my favorites, like the, I mean, the E.

Speaker A

Cred: another cycle, it's gonna go really high, ideally up to the all-time high and through it. And just Cred: that alone can save you so much. Whereas I think, historically, certainly in this sort of 20 Cred: 18 to early 2020 era. Most of my fuck-ups can be attributed to this type of like, epistemological

Speaker A

Also like it was a totally d

Speaker A

Cred: effect am I trying to monetize and what is the shape of the trade that I'm taking, bigger picture.

Speaker A

Cred: This whole like, loose, no, it's not even a loose thesis. It's just this like, wishy-washy, understanding Cred: type of risk I'm trade taking. And for the type of move that would warrant it, I I think, I, you know, you

Speaker A

Cred: just want to be a trader every single day. So you take a monthly and then jump into your intradays Cred: and go back and forth, back and forth. Um, and I think that's what really the generic zoom out

Speaker A

Cred: advice is trying to convey. It's not that, you know, higher time frame is always better. I mean, Cred: to some extent that can be true, but I think it's more like, Hey, remember why the fuck you're in

Speaker A

Cred: this trade and why you have the risk posture that you have and what you expect to happen.

Speaker A

Cred: And as opposed to letting these short-term deviations drive you fucking crazy. And I think, Cred: for that period for me, that you contribute most of my fuck-ups exactly to that practice.

Speaker A

Cred: Uh, in one, in one form or another. Yes, it's very hard to come back from as well, especially if you, DonAlt: yeah, well, said. I think. Generally, like, just taking too much DonAlt: risk can easily also just derail your entire plan. Because then you go from having that like

Speaker A

DonAlt: high time frame plan to just stressing about the numbers. Because, like, when you take a lot DonAlt: of risk around high time frame levels, yes, there's more likelihood that you're gonna, that you're.

Speaker A

DonAlt: Gonna hit it. But also the moves are gonna just spook you out, because around those high time DonAlt: frame levels, the market just moves bigger than you than you might otherwise think. And then and then DonAlt: you're like, Oh, shit, I'm up this much already and the price is up five percent, and you're like, Oh,

Speaker A

DonAlt: I'm gonna close now. Or like, price is down, like five percent. Like, that's much more than I'm DonAlt: usually down because I usually trade lower time frames. Let me just call this a wash and get out, DonAlt: even though it's not invalidated anything. So like, there's like a bunch of stuff playing into

Speaker A

DonAlt: into the how to up, like a high time frame idea. And like, it's all like, taking too much risk or DonAlt: over management. Usually, like, those are the two that that break most people's most, most people DonAlt: trading. Yeah, yeah, and you might, you might think that like, Oh, like, but the sizing, like, if you size,

Speaker A

Cred: fuck up like a big opportunity. And you know exactly why you did it. You might think the Cred: default is well, now that I've learned I'm never gonna do it again. But at least in my experience, Cred: that's not how it works. It kind of just like, more permanently changes how you approach these things,

Speaker A

Cred: and not always Cred: in the best way. Um, I definitely agree on the sizing piece. You can have the best plan and then Cred: you see your PNL move, you know, 10 times more than you're used to every tick and just start

Speaker A

Cred: fucking freaking out, you know? Um, and then a similar bucket to this, which I think would have Cred: saved me a lot of heartache, heartache. And the interesting theme here is that these are like Cred: principles and sort of understanding and decomposing trading. Once you have those, like

Speaker A

Cred: the downstream stuff, is pretty easy to imagine, manage, but if you don't have those, then you're Cred: sort of a slave to everything. Even you know, your unknown, Cred: unknowns. Um, but the second thing is volatility adjusted sizing, right? Um, I don't know how many

Speaker A

Cred: times you've done this, but I remember when. Whenever we'd have these like massive downside Cred: moves, where the market would, you know, huge liquidation cascade, my market would go completely Cred: fucking illiquid. And so any buying or any selling, just like all being fired into an empty book, and

Speaker A

Cred: the market was whipsawing like crazy. Those had some of the best fucking scalping opportunities Cred: ever, right? You can catch like a 10 20 mean reversion with a 10 or 20 percent mean reversion Cred: within an hour. And that can sort of make a quarter and present huge opportunities in general. But

Speaker A

Cred: oftentimes, those types of vol expansions happen after a period of pretty compressed volatility.

Speaker A

Cred: So where I would catch myself naturally and get fucked over is that I would get used and again, Cred: from an app. From a framework perspective, I would be sizing for a low volatility mean reversion Cred: regime, regime shifts to high volatility and shit breaks and the markets are liquid, etc. And I'm still

Speaker A

Cred: using the same fucking sizing as I was, you know, before that happened. And so suddenly, you know, I'm Cred: inputting the same numbers into the order form. You know, whatever your muscle memory, uh, develops at Cred: that point into, oh, yeah, you know, for an intraday punt, this is this is roughly my sizing, and this

Speaker A

Cred: is roughly my invalidation. Well, now, both your invalidation and your sizing and your volatility Cred: sort of, uh, reference point are all wrong. And that starts fucking with your head, too. Because, Cred: I mean, typically for me, it was oversizing into those things. I'm not expecting the market to move

Speaker A

Cred: that much. So, you know, it's like, oh, I'd normally draw down two to three thousand dollars and then Cred: three percent. And that's sort of the Um, MAE or whatever. Like, I'm used to this type of loss

Speaker A

Cred: threshold, but then you sort of scale in. First of all, you get slipped a lot more because the markets Cred: are liquid, and then it fucking moves down five percent because the markets are liquid. And I'm Cred: like, Oh, I'm not used to my PNL looking like this and it fucks up your management all the same way.

Speaker A

Cred: So, like, volatility adjusted sizing is just, you know, right now. If I had to sort of not teach Cred: someone how to trade, but at least build a framework or set of principles, that would be like.

Speaker A

Cred: I'm not using this as my business model when I'm doing it. So I'm just gonna go ahead and Cred: make it a little bit more complicated. And I'm just gonna kind of go through those things because Cred: certainly fucked me. Uh, especially in those opportunities where, you know, it's one of those

Speaker A

Cred: free money on the ground type of things, everything is broken. If your sizing is wrong, then, I mean, DonAlt: too big and it goes in your favor. Then, like, it kind of cancels each other out, right? You're like,

Speaker A

DonAlt: Oh yeah, I'd lose more, but I also gain more, but the funny thing is, you don't, because if you gain DonAlt: like we, we talked about. Like, if if the P L is much greener, then you usually

Speaker A

DonAlt: have it. Um, you're gonna do something dumb with it, um, which then makes it like that. The size DonAlt: doesn't really benefit you on the way up if you're right, but it also doesn't really benefit you. Like,

Speaker A

DonAlt: you get doubly on the on the way down, so you're kind of like, in this loose situation, DonAlt: um, which is like, it's just funny how how the human mind works, because you'd think, like, DonAlt: Hey, this guy's just risking more. So, like, if it goes well, that's gonna be especially

Speaker A

DonAlt: good. If you're like, you're gonna lose money, if you're gonna lose money, if you're gonna lose money, DonAlt: good, um, but nope. Like when it goes well and you have too much size on, you're also gonna do

Speaker A

DonAlt: something stupid. Most of the time. Like, sometimes, sometimes you get lucky, like I did with Eve back DonAlt: in the day, um, and then you're cognizant enough, like I was so bullish that I was like, I'll just.

Speaker A

DonAlt: Like, this is, this is stupid, but I'll I. I will not forgive myself if I close it, um, DonAlt: but that's a rare occurrence. Usually it's like, you have like this great plan, you DonAlt: plan everything out and then you your P l screen. You're like, Okay, I'll close this.

Speaker A

DonAlt: And then open like a more reasonable size position, like at support again, and then that's just a free DonAlt: trade. Whatever you do something stupid like that, you lose your position. The market goes DonAlt: from 10k to 60k. And you're like, and that stuff happens all the time to people. And

Speaker A

DonAlt: the funny thing is, after something like that, I've seen a lot of people, um, just rate shorting, um, they're DonAlt: just like. I didn't make money on the way up, even though I knew it was gonna go up. Now I think it's

Speaker A

DonAlt: gonna pull back. So I'm gonna short make that money back that I'm owed by the market and then I'm gonna DonAlt: get back on it. Uh, seen that so many times and people just get completely carried out and they're

Speaker A

DonAlt: like, big time frame, super bullish. And then that just carried out. Because they shorted. Like the DonAlt: worst setup on planet Earth after having, like, a really good long setup. Uh, the same is obviously DonAlt: truly for for the inverse, right?

Speaker A

DonAlt: Uh, like you're bearish at the top and like, same thing can happen. Um, but yeah, it's just DonAlt: interesting trading lessons that you just learn over the years. Um, yeah, Cred: everything becomes 10 times harder, and I've definitely fallen victim to that. A shitload,

Speaker A

Cred: 100. Oh, for sure, that that's a big one, the one you mentioned this sort of Cred: opportunities, um, both of which are terrible ideas and will have a very negative impact on your, on Cred: your career. PNL Um, there's, do you remember, at one point on Crypto Twitter, there was this practice of

Speaker A

Cred: like, I'm gonna scalp short while I'm long for this, like tiny pullback and like. That was just Cred: like one of the dumbest things, um, I've I've ever seen. And the way it's sort of come up in my

Speaker A

Cred: trading is I? I just sort of? I don't know where I fully fall on this, but like, the basic idea is I. I Cred: sort of look at some of these high time frame moves. And I can basically remember what I did

Speaker A

Cred: for all of them. Looking at the monthly, right? Um, and dude, there aren't that many trades here.

Speaker A

DonAlt: Yeah, Cred: you know, like in a in a nine year career, there really aren't that, at least on the BTC side. There Cred: aren't that that many trades that are going to make your year or make up your PNL on the whole.

Speaker A

Cred: And I just wonder, like, I sort of half wish I spent so much less time just Cred: trading bullshit, you know, stuff that's fucking invisible on this chart. Um, the counter argument Cred: there is like, well, you know, that's, you're kind of sharpening the blade, uh, and you need to stay

Speaker A

Cred: in tune with the market. And I think there's some amount of truth there. Where I think it stops being Cred: true is if those so-called sharp blade sharpening trades end up fucking with your execution and Cred: management of those big picture ideas. And I think I definitely fell into that bucket, uh, quite a few

Speaker A

Cred: times, increasingly less as time went on. But early on, I couldn't Cred: hold a high time frame trade to save my life because I would then over index on the next Cred: four hour or daily time frame. Uh, level, you know, five percent above it, and that's just like an

Speaker A

Cred: obvious compatibility issue. Like, I either believe the monthly time frame trade is gonna hold and is Cred: worth risking, and I clearly did believe that because I took the fucking risk. In which case, Cred: by definition, I cannot consistently let myself be swayed by these intraday lower time frame

Speaker A

Cred: types of rotations. Um, and I don't know, I don't know, I don't know, I don't know, I don't know.

Speaker A

Cred: And I think that type of behavior just made it really fucking tricky to consistently catch these Cred: monthly things. Because you then build a pattern of, oh, okay, even if I'm buying the monthly, I'm still Cred: sort of managing it, uh, on lower time frames. Now, you can avoid that entirely by saying, I'm trading

Speaker A

Cred: the monthly, I'm only looking at the monthly. And I think that's a pretty good spot for most people Cred: to start, uh, but then there's basically, you know, scope. Creep finds a way where you're like, Okay, Cred: well, I'm managing on the weekly, but I can take a peek at the daily, you know? Like, maybe the Daily.

Speaker A

Cred: Tell me some secret, and then you're like, Well, you know, the daily is only once a day, but this four Cred: hour is pretty interesting. Then suddenly you've gone from a monthly time frame just through pure Cred: sort of, uh, you know, lack of guard rails, plus scope creep, plus boredom. You've gone from a monthly

Speaker A

Cred: time frame trade, where thing goes from a monthly to B monthly. Suddenly, you're on the one hour chart Cred: because there's some failed breakout taking place. Which, again, one week, two, one month, one year later, Cred: is just going to be completely invisible and most likely shouldn't affect the trade whatsoever. But

Speaker A

Cred: I think it's really important to think about the trade as being easy and tempting to find a reason Cred: to trade and sort of sabotage your own idea. Um, and I think just looking at this monthly chart

Speaker A

Cred: has sort of made me reflect on that. Just, you know, I've done the exercise before, I don't know if you've Cred: done this. Where I've looked at a high time frame rotation from, like, you know, a couple of rotations

Speaker A

Cred: ago. And then I look at my trade history for that period, it's like there should be like a small Cred: handful of trades there in that period, if it was executed, if it were executed correctly. And then I

Speaker A

Cred: could just all sort of, just like, do something in that period, and then I'd just be like, I'm just Cred: like, I'm just going to keep trading. It's just like there's like some sort of grid bot.

Speaker A

Cred: That's misconfigured, even though it was, uh, all manual click trading. And it's just one of those, Cred: like, what the am I actually doing here? And I think it came from, um, all the things I mentioned, Cred: like sort of boredom and temptation and lack of guard rails, etc. But all of these things that we've

Speaker A

Cred: been hammering on about, at least to me, I don't know what your take is. But for me, it just came from a Cred: very like bottoms up as opposed to top down understanding of trading in a trading system. Uh, and

Speaker A

Cred: I would just sort of pollute the context window with all this like low time frame intraday slop Cred: and then just lose fucking sight of. Why am I taking this amount of risk? Because if you were Cred: to tell me, Hey, this is your position size, uh, what do you think the trade is? I'd say, Oh, this must be

Speaker A

Cred: some sort of fucking, you know? Mostly spot or spot margin oriented or very clear invalidation PerP Cred: high time frame shove and that would be correct. But if you were to give me the same risk posture Cred: and say, Oh, yeah, you're here. Using like the hourly time frame to manage this. I'm like, Oh my god,

Speaker A

Cred: either I'm like a Deca billionaire or something's gone terribly wrong. Because, like, this type of trade Cred: management is not commensurate with the amount of risk taken here. And those types of like both Cred: duration and risk mismatches, um, are what fucked up? A lot of these high time frame moves for me

Speaker A

Cred: historically. And I just think it can be traced back to not having, like, a proper top-down framework Cred: and principled understanding with guardrails of what the fuck I'm doing? I'm wondering, in your Cred: case, how you sort of,

Speaker A

Cred: upon reflection, view those types of periods. I mean, certainly the 2020 grind, but I'm sure there Cred: have been other periods where you're like, I was right three months ago. What the what the fuck am Cred: I doing here managing this thing? What would you? What do you think? The underlying cause there is?

Speaker A

Cred: Yes, yeah, yeah, I was gonna ask, like, what do you think the cause of that is? Is it sizing related?

Speaker A

DonAlt: Oh, I mean, I I feel like I've always been kind of like, good with the from high to low time frame DonAlt: thing. The one thing that I'm not good at, like there's like I have different problems

Speaker A

DonAlt: from from like, I from yours, which is basically like, I always close my trades too early. Even though DonAlt: I'm like, I'm like, Oh yeah, this is probably still gonna keep going. But I kind of feel like the trade

Speaker A

DonAlt: of of this cycle is kind of done. Like I've made enough. Um, like, I look at the P L, I'm like, Okay, DonAlt: this is just enough. I can just chill now and then, like, the market goes up another 2x. And I'm like,

Speaker A

DonAlt: that was stupid. I kind of figured it would go that high, but I was like, okay, this is a DonAlt: enough. Like. So there's like, and I don't know like, like, how to even like, what that even is

Speaker A

DonAlt: like. A lack of greed, the lack of kind of like, sticking to my plan, I don't know, but I always DonAlt: close my trades too early, but I usually stick with them at least for a while from the get-go.

Speaker A

DonAlt: So I don't have, don't, don't have the problem of okay, I'm, I'm closing DonAlt: because of lower time frames. I'm also I'm too lazy to, um, and have been just historically just DonAlt: keep letting, letting stuff run.

Speaker A

DonAlt: Um. But I, I do close it at some point, way before my my actual target. I mean, you do remember these DonAlt: talks that we had? Where I'm like, Okay, I'm targeting, I'm targeting like at 16k, when when

Speaker A

DonAlt: we're talking, I'm like, I'm targeting 100k. And everyone's like, you're moron. And I'm DonAlt: like, that's kind of like, that's like, that's kind of like, makes a lot of sense to me. Um, DonAlt: after all of this, to go like proper high. And then I end up selling at like

Speaker A

DonAlt: 40k and I have to chase, um, at like 50. Because I'm like, oh, like, that was stupid, like, why did DonAlt: I close it 40 when I'm targeting 100? Uh, so that's kind of like been for me the story of the game,

Speaker A

DonAlt: where, like, in all of these moves, like, oftentimes, I get them right. Um, but like, somewhere halfway DonAlt: through, I'm like, okay, this is like, I'm like, this, this is too much. Uh. And then I close it and I have

Speaker A

DonAlt: four for the next leg, or sometimes sit out the entire leg and wait for the next cycle, DonAlt: which is fine by me. But there's something where I'd be like, from like a professional trader's DonAlt: perspective, like, that's my biggest flaw. Like that, I just at some point I'm like, Okay, this

Speaker A

DonAlt: has been enough, like, I don't, I don't give a anymore. Um, and then Cred: is it like a time apathy type of thing where you're like, I've spent enough time in this trade?

Speaker A

Cred: Is it generally being a bit jittery? Is it a previous experience? The sort of Cred: eventually, kind of like a flashback, the sort of sort of what to say to people? Or it's the DonAlt: No. It's just, I think it's just like, basically, I've like, and this is like the dumbest thing

Speaker A

DonAlt: that I'm ever gonna say. But I kind of feel like I've proven my point, DonAlt: you know, like, I'm like, because I get like, very, yeah, like the dumbest thing ever. But I kind of DonAlt: feel like that's that's where it comes from. I'm like, I'm buying 16k, I'm like, you guys are all

Speaker A

DonAlt: morons and then it runs 240 and I'm like, see, like, you guys have been like this stupid, DonAlt: like you were stupid. And now like, whatever like. I've proved my point, I can, I can do whatever I

Speaker A

DonAlt: want now. Um, yeah, yeah, I mean, it's probably like the ego thing, more so than anything else. Um, it Cred: about like a period that you kind of you just sort of a chance of, like, knowing what to do

Speaker A

DonAlt: is obviously like, I'm kind of like, DonAlt: also the number where I'm like, okay, this is just getting uncomfortable if I round trip it.

Speaker A

DonAlt: Like this, like this, is the work of kind of like one whole cycle. And I'm kind of happy with this DonAlt: result and I wouldn't be happy if I round tripped it. So it's kind of like a mixture of both. Um, like,

Speaker A

DonAlt: I'm like, like, legit? It's a feeling of okay, this is enough, and I wouldn't be happy, I wouldn't be DonAlt: happy with giving it back. Um, yeah, yeah, but the funny thing is Cred: what to say to help them. And some of the people like, it's not like, I don't know, like, really

Speaker A

Cred: like, only fun things, which is, you know what I mean? Like, if you're a trader, you're not DonAlt: that. I think if I didn't have that, where I'm like, okay, this is enough, I would have probably DonAlt: gotten run over like much more in my trading career. Um, like, oftentimes I'm like, okay, it's

Speaker A

DonAlt: enough now, and then I close and then the market trades significantly lower than where I closed DonAlt: it afterwards. Um, anyway, it might go up like a 2x after, but then it goes down like 70, 80. So it's

Speaker A

DonAlt: kind of like it's protected me a bunch from the wild swings that happen in crypto. But also my upside DonAlt: much more capped than than other people's. Like, you see some people, they they just run it up like

Speaker A

DonAlt: 10 000 x in the cycle. That would never be me, um. But also those same people lose 99 of their portfolio DonAlt: and I don't even get close. Like there's not been a bear market where I've gotten, like, like, completely

Speaker A

DonAlt: wrecked. Um, usually I'm I'm doing just fine. Like even after like a 50 drawdown, I'm down barely DonAlt: anything. Um. But also like DonAlt: during the run-ups, I'm I'm the one that underperforms. Even though I had the right idea

Speaker A

DonAlt: from from the get-go, it's kind of like how it's been for me every single cycle. Um, like, I see, like, Cred: gonna be a trader, right? It's like, it's not a matter of like, do you think this is fun? Or

Speaker A

DonAlt: I see people argue with me that it's bearish and I'm like, not as bullish. And at the end of DonAlt: the move that I correct correctly predicted from the bottom, they probably made percentage-wise DonAlt: more than I did, even though like they were disagreeing at the bottom,

Speaker A

DonAlt: um, but then they also disagree at the top that it's not the top, and then they give it all back.

Speaker A

DonAlt: So it's kind of like, it's a weird one, um, but I, I don't think that's necessarily something anyone DonAlt: should be copying because it's just not good trading. Um, it's. It's a flaw of mine, most definitely.

Speaker A

Cred: You know what I mean, like, that's what you're saying, right? And so that's kind of the that's Cred: the thing, though. I think, yeah, I would say, yeah, I mean, you know, like the interesting pieces there is, like it is a manifestation of ego. I think the effects that have been shown over the last couple years has been kind of like, it really just been a potential development. And now I'm not sure if,

Speaker A

Cred: but like, a very weird one, right? Because typically, the way ego manifests itself is in the opposite Cred: direction. Where you're like, I was so right. I'm going to keep holding this past my target, you Cred: know? Or the market is so wrong that I'm going to keep averaging in. Whereas yours is like a earlier?

Speaker A

DonAlt: Yeah, yeah, yes Cred: threshold on the other end of the spectrum of point proven ego, as opposed to being something Cred: technical or trade related, etc. Which is interesting. The PNL piece makes sense to me, it's a form of PNL

Speaker A

Cred: trading. Um, but I think that can be sort of decomposed into two sort of common behaviors.

Speaker A

Cred: The first is just like, you look at the PNL and you're like, this is enough money for the cycle, Cred: whatever, which is a form of PNL trading. Uh, but the other one is, and I think this is something

Speaker A

Cred: that we've spoken about before. When, when sort of discussing these high time frame ideas, you have a Cred: very low fucking, um, tolerance for open PNL drawdown. Like once you open, like, that's sort of, Cred: I think it's sort of

Speaker A

Cred: maps to what you've said here. Like you, you try to trade at the inflection points, um, and the re.

Speaker A

Cred: And when it gets to, like, a lot of the time, it's not the first level of resistance. That's what you Cred: tend to ignore, but it's somewhere between where most people think it's going to turn around, Cred: they're wrong. The market pops and I'm like, Oh, Don must be so happy now. And then I talk to you.

Speaker A

Cred: You're like, Oh yeah, fucking salt. I'm like, What do you mean? This is? This is like peak validation for Cred: you? But I think, like the sort of pattern, there is a very, yeah, low tolerance to, uh, sort of open

Speaker A

Cred: PNL trading. And then you're like, oh yeah, I'm like, oh yeah, I'm like, Oh yeah, I'm like, oh yeah.

Speaker A

Cred: Drawdown or volatility? Um, which is again, technically a flaw, right? If we open the Cred: professional traders handbook, uh, under the gut section or whatever else, there's the. You know, Cred: the big buckets are stuff that you subjectively care about and make your brain work a certain way

Speaker A

Cred: versus the objective parameters of the trade. And I don't think everyone should just live in the Cred: second category forever. I think you naturally develop a sort of gut and instinct through Cred: tens of thousands of hours of screen time and trades, etc. That's definitely

Speaker A

Cred: worth something. Um, but this this open PNL uh, allergy you have to any type of drawdown, I think is, Cred: I think it's very interesting. Oftentimes, the same type of mental illness that makes you your money Cred: is the same one that either loses it for you or precludes you from making more. That. That's kind of

Speaker A

Cred: one foundational thing that I believe in, you know, like the same people who are up 10, 000 x and just, DonAlt: yes, yeah, I could see that, yeah, Cred: held through the whole thing. That same mental affliction is the same reason why. They can't just

Speaker A

Cred: like, close their eyes, and they can't close their eyes. And they can't close their eyes. And they can't Cred: close it or trail it out or do whatever like, you sort of have to live through, um, that, on both ends.

Speaker A

Cred: Of the trade, I think, in your case, the reason is, you know, the reason you're so good at buying Cred: bottoms and trading inflection points is actually the same reason. That ends up forcing you to close Cred: early and not tolerate the drawdown once the position is open, you know, um, like, I think often

Speaker A

Cred: times, if people take a look at their own trading, whatever edge you have on the sort of entry and Cred: execution side, as favorable as it is. Oftentimes, it will come up in one shape, way, shape or form

Speaker A

Cred: in the trade management and closing side of it. Um, and that's a very interesting pattern where Cred: you'd have to, like, fix it, or, do, you know, address it immediately. But it's a fun one to decompose.

Speaker A

Cred: Like, what does my mental illness profile look like? Uh, it's like, okay, well, my mental illness Cred: profile makes me like, allergic to drawdown, uh, and allergic to big moves. And I can just, DonAlt: yeah, it's quite funny though, like thinking about it, like, I

Speaker A

Cred: fucking hold through anything and I don't give a shit. It's like, Okay. That's really helpful Cred: for what sort of when you're right and you manage to catch a trend, much less helpful for when things Cred: turn around, then you refuse to sell, so like, how do you mitigate that? And on the other end, it's like,

Speaker A

Cred: you know, in your case, for example, of like, I am fucking allergic to, uh, drawdown on my entry and Cred: I'm going to be super precise. And then you look at your exits and trade management. It's like, oh,

Speaker A

Cred: well, it seems, even if when I'm right, that behavior persists. And how can I sort of optimize that, or Cred: smoothen it a little bit to, uh, squeeze more juice from it and so on, and so forth? That's something I

Speaker A

Cred: really believe in terms of, like people's, the the patterns that make it. So that you can't Cred: make people money. Or often come up in the things that either make them less money or lose the money Cred: downstream. And doesn't mean you have to, like, remove the whole thing and, uh, cut out the tumor.

Speaker A

Cred: It's more of like, how do you manage the the other half of it? Oh, yeah, dude, it's over. Yeah, for sure.

Speaker A

DonAlt: I'm like, way too old to change this. This always gonna just be like, I, I like, I don't, I don't DonAlt: really care about it, I know. Also like, it's funny because back in the day this wouldn't have been

Speaker A

DonAlt: how I think about it. But nowadays, I kind of like, like, I actually think, like, enough is enough. You DonAlt: know what I mean? Like, it's, it's like back then, it's like, it's just I'm like, Oh, wow, this is like,

Speaker A

DonAlt: this is great. But now I'm like, kind of like, with every cycle, I've been like, okay, if I catch like DonAlt: a good 25 to 50, DonAlt: it like, I'm more than happy with that. I don't really care about getting the rest. Um, so it's

Speaker A

DonAlt: kind of like, that's gonna be me and like, that's gonna be a thing. That's gonna just be with me DonAlt: for the rest of my life. Just because that's kind of how I'm used to it now, um, but also, like, if

Speaker A

DonAlt: you're early in your trading career and you you can, you can kind of influence yourself a little DonAlt: bit more. Um, probably worth looking at these kind of things before they become so ingrained that DonAlt: that just becomes part of your personality. Or maybe it's always been a part of my personality?

Speaker A

Cred: Yes, I, I completely believe this stuff is persistent and is derived of sort of semi-permanent.

Speaker A

DonAlt: And I'm just kind of like, enough is enough and and that's kind of like a thing that in life that DonAlt: is just for me. Like a thing that's that's been with me, like, enough is enough is. It's quite often

Speaker A

DonAlt: like, it's something that that that I think and and say quite often. It's like, okay, cool, yeah.

Speaker A

Cred: Personality fixtures that people have, and that's not something you get rid of easily if you're a Cred: discretionary trader.

Speaker A

Cred: Oh, yes, you can, you can, you know, automate things and set harder guard rails, etc. Um, so, it is fixable, Cred: as you mentioned. But I truly believe the whole like, I mean, trading psychology as a category is

Speaker A

Cred: pure fucking slop, right? Like, if you don't have an edge, you will just lose money due to transaction.

Speaker A

DonAlt: Yeah, quite funny, yeah, Cred: costs. There's the one sentence version, uh. And so no matter how many, like Meditation, Zen, podcast, Cred: audio books you listen to, it won't make edge magically appear and won't make you sort of

Speaker A

Cred: make money. Cred: Um, where I think the psychology piece is useful is a more sort of, um. Knowing yourself and how Cred: your preferences and habits, and what you reach for in times of stress are likely to come up and

Speaker A

Cred: influence your trading. Um, like you, you just link the enough is enough to your own trading, and Cred: that's a sort of general life type of principle. Um, in my case, there's a very clear map. Because Cred: once I get very sort of, um, attuned to something and sort of obsessed with it, and, you know, becomes

Speaker A

Cred: a big part of my life. I'm a big fucking micro optimizer, I'm a big fucking micro optimizer. I'm a Cred: big fucking micro optimizer, you know? It's like, how can I make this two percent better? And like, it's

Speaker A

Cred: not entirely clear that making something two percent better will actually lead to noticeable Cred: or visible results. But the idea that there's this two percent optimization that exists, and I'm not Cred: capturing it is like an itch that I have to scratch. And that maps perfectly to this fucking

Speaker A

Cred: low time frame management, right? It's the same thing of, yeah, it's exactly the same thing. It's, DonAlt: yeah, Cred: literally the same behavior that I have in other facets of my life. Of. You know what Cred: incremental gains can I squeeze out for results that are redacted? Slash, question mark, slash on.

Speaker A

Cred: Unclear. And I still do that, you know, they're trying to fucking mitigate it in other parts of my Cred: UM life. But for trading, it 100 shows up in the same way. It's the same guy who's like,

Speaker A

Cred: Yeah. But there's like an intraday rotation that I can add to this monthly and get my average down.

Speaker A

Cred: Or if I sort of scalp here and do this, it's it's the same fucking behavior. Um, so I would Cred: suggest to people, you know this, not in a very sort of cringe way, but some amount of self-reflection

Speaker A

Cred: as to how you behave and what patterns and modes you reach for. And then try to Cred: see objectively, if it maps to a certain trading behavior, especially one that, you know, is costing Cred: you money or acts as a form of sabotage. And I think the results will be interesting and something

Speaker A

Cred: like this is likely to emerge. Like, you know, we didn't plan this shit. We just Cred: start recording and chat. It's like, Hey, don, we're going to do a section on, you know, childhood trauma Cred: and how it manifests in candlesticks. You know, like that is clearly not what's going on here.

Speaker A

DonAlt: Yeah, not, not really now. Um, yeah, and I, I, I generally believe, um, that, um, with with this.

Speaker A

Cred: But just through, just like open conversation. There's a very, I I think, a plausible map between Cred: the shit that we do slash, believe, slash, we're brought up with, or whatever other combination Cred: and stuff that comes up with our trading. Um, and that was on the fly. So I really do think there's

Speaker A

Cred: some sort of link there that's interesting to explore. Even if, again, the goal isn't to Cred: fix it or remove it completely. It's even know thy enemy is a, I think, a useful outcome of that type of

Speaker A

Cred: exercise. Also, we've not spoken about the market at all. But, to be fair, is there fucking anything Cred: to talk about? Don No, No, I think we've. We've put a lot of lipstick on this pig, given given the hand

Speaker A

Cred: we're dealt. Yeah, 100, um, I I think that's, to be honest. Like there's the epitome of useful trading, DonAlt: kind of, like your personality plays into your trading, right? Um, that not everyone should trade DonAlt: the same way. This is something that I say a lot when I talk about, like my trading, it's like, Hey,

Speaker A

DonAlt: you don't really need or should copy exactly how I trade. Because if you copy it DonAlt: and you're just a different type of personality, you're probably not going to have much success DonAlt: with it. Um, you can kind of like, look at how I look at the market, or like how you look at the

Speaker A

DonAlt: market. And kind of take from the experience and kind of take some lessons from it. But just DonAlt: generally, like, the way you trade should really be something that corresponds with your personality, DonAlt: like where you can take advantage of the way your personality works. Um, and I think that conversation

Speaker A

DonAlt: is pretty much exactly DonAlt: I like, like it's a really good read, like it's a good, really good look into why I say it. Um, I've DonAlt: actually never really thought about it that deeply, other than like, in this conversation just now. But

Speaker A

DonAlt: it's kind of like, that's the reason why I say, like, hey, like, everyone is like an individual and DonAlt: just should be trading different based on based on how they are. And it's exactly this. Like you DonAlt: will have your own flaws, and the flaws can be like an advantage in in other ways. And then you can

Speaker A

DonAlt: just, yeah, just trade around that. And you really shouldn't be trying to focus a trading style that DonAlt: really doesn't fit your personality. Because if you do, that's probably not gonna go so well.

Speaker A

DonAlt: Oh, it's funny that you say that because I just two days ago, three days ago, made a video on this.

Speaker A

Cred: Psychology is some version of that, where it's not about, like, altering your mind state, or, you know, Cred: cold plunges or whatever else. It's about sort of knowing yourself and mapping your trading to stuff Cred: that you find generally lower friction, as opposed to forcing yourself into a um, high friction area.

Speaker A

Cred: And I think it also, in very practical terms, if you are the type of Cred: over managing, optimizing, um type of person, why on earth would you confine yourself to, for example, Cred: like a monthly time frame stuff? You just won't be able to sit there. I mean, that is literally the

Speaker A

Cred: anecdote of my experience, right? It's it's poorly handling the friction between what? The demands of Cred: my personality, uh, versus the reality of the type of trading, uh, that I chose to do. And it works the Cred: other way around as well. If you're like, a, you know, super

Speaker A

Cred: chill, yeah, I'll just like, check in on this thing. Not bothered. Um, this stuff isn't deterministic. I'm Cred: happy with the risk and let it ride. And then you tell this person, No, no, bro, you can't do that, you

Speaker A

Cred: can't just, you know, trade the high time frames and check in. You know, every week or every month.

Speaker A

Cred: You have to get in and start optimizing your intraday trading and turnover and rotations. And Cred: try to get every little, uh, squeeze every single dollar from this market that you can at every Cred: single point. And you know that that kind of behavior, I think that would be bad advice for

Speaker A

Cred: that type of person, uh, it would be bad advice for that type of person. And I think that's the Cred: thing that would drive them insane. Just as in the way of, you know, if you take this intraday person

Speaker A

Cred: who's like obsessing over intraday low time frame edges. You're like, bro, just relax, you know? Like, Cred: just take a monthly trade and chill. It's like, What do you mean? Like, I'm stimming out at my desk here,

Speaker A

Cred: like, There's no way I'm gonna chill. Um, so, like, a lot of trading advice, I think is like harmful for Cred: that reason, because it doesn't take the UM personality friction into account. And just as a Cred: completely aside, general point, have you ever noticed in these like motivational slop threads

Speaker A

Cred: like that? Like, if you look at them and read them, it's basically like, if you, if you were to decompose.

Speaker A

Cred: Them, the five rules are trend, trend, trend, momentum, trend. Like that's it, and then maybe something Cred: around sizing or a lot of these, like trading wisdom. Things very easily decompose into either Cred: like some version of, um, volatility, adjusted sizing and generic risk management stuff. Or

Speaker A

Cred: it's literally taking like a big bucket of market effects like trend or momentum, being the big one, Cred: and and using some of that momentum to like to, like to, like to, like to, like to, like to, like to

Speaker A

Cred: some, some AI, intentionally or not to, uh, transform them into like a single setup or system. Like, there Cred: are no new things under the hood, and the new things that are under the hood are like intraday

Speaker A

Cred: edges, which disappear within sort of one day to one week. Um, if they're structural like that, so Cred: there's just a bit of like, the fog of war when it comes to retail trading. And shit is so massive. And

Speaker A

Cred: I was fully captured by it too. You know, and fucking buy these courses in 2017. It's like, Oh, that's how Cred: you draw the box, you know, like all all those types of things. And then you're like, Oh, my God.

Speaker A

Cred: I'm like, I was trying to have an awesome time here doing these classes. But it's what IPL means DonAlt: channel about how to draw support resistance.

Speaker A

Cred: But I'm like, I'm used to carrying around. I would have scored about 900 of that type of money.

Speaker A

DonAlt: No, it was free DonAlt: and it basically. I said, like, hey, this just entirely depends on on your view of where the DonAlt: market is gonna go and how it should be behaving. Which I think is just the way this trading thing

Speaker A

DonAlt: is like, people try to force it too much into. This is the way to do it, and if anyone tells you like, DonAlt: Hey, this is the way to do it, um, and charges you money for it, that person is a grifter 100.

Speaker A

DonAlt: I don't think anyone that's actually traded a bunch. I will say that there's one magic bullet.

Speaker A

DonAlt: It's all just like you have to find your way. Um, and everyone that has been successful trading DonAlt: has found their own way, rather than having been handed it. I think, yeah, yeah, yeah, pretty much the.

Speaker A

Cred: And if that was growing for him to finally kind of take over what Hadame was, what I could definitely Cred: have done. Pass me some money back. But in the end, he forgot something. There's also this is

Speaker A

Cred: especially on the fucking te side, right? Like Jesus Christ. You're drawing a box or drawing a line, and Cred: then generally looking for absorption and reversal, or a break from balance at that line. That, that's Cred: it in a nutshell. Now, obviously, there's, you know, a ton of the devils in the details. You can have the

Speaker A

Cred: that der Cred: musique Cred: obile Cred: a Cred: like. If the best a trader where to share all of his levels is sings a woman cannot have one Cred: levels on Twitter for free every single day, most people would still lose money, right? Sort of

Speaker A

Cred: definitionally. So clearly, the edge isn't on how you fucking map the market, it's sort of what you Cred: do around it and how you manage your risk and sizing and trade management. Every other thing Cred: there's fixation with, Oh, this is the level, and if it does exactly this, this is the signal. This

Speaker A

Cred: is just a massive, massive distraction. But it's also I think the reason it's so persistent and Cred: effective is precisely because it's relatable. Like you start trading and you're like, Wow, Cred: this trading thing, how complicated is it? Like you don't know what you don't know. And then some

Speaker A

Cred: guys like, we just draw this box. And when this happens, you do this, you make money, but if this Cred: happens, then this happens, you do this and then you make money. And it's like, Oh, great, fantastic.

Speaker A

Cred: Like this, this seems very accessible. Let me let me get a new iPhone for my phone trading and Cred: figure this whole piece out. But yeah, listen, I think we've yammered on for a very long time Cred: as far as the market on the whole. We talked about BTC being stuck in the same place,

Speaker A

Cred: right? Cred: ETHUSD is actually looks very similar to BTC now, with like this underside retest ETHBTC breathed a DonAlt: same. Yeah, which is surprising, given all the other or coins have been eating like massively Cred: little bit. But it's not some big, fucking structural thing. It's just been going up over

Speaker A

Cred: the last few weeks. But I, I completely agree. It's just the USD pen. Oh, XRP has not been having DonAlt: like, look look at XRP, BTC and compared with what Eve BTC has been doing, so there's clearly some red

Speaker A

Cred: fun, huh? Yes, we should start calling it absence of weakness. I think relative strength is just, DonAlt: but sold the same like any BTC pair that you look at. Um, you will see like, garbage price action. And

Speaker A

DonAlt: for Eve, it's actually quite constructive. Um, so I think that's quite notable, uh, on the relative DonAlt: strength side side of things, but it's that exact. Yeah, it's. It's kind of funny, because that relative, Cred: like it, gives off the wrong vibe.

Speaker A

DonAlt: Strength, slash, DonAlt: absence of DonAlt: weakness has taken Eve to exactly the same technical setup that I have for Bitcoin. Um, with, Cred: yeah, like this weekly underside thing, yeah, and you'd want the majors to all look that way.

Speaker A

DonAlt: this, yeah, we're just retesting it from the underside. Um, so if Bitcoin breaks this, I think.

Speaker A

DonAlt: Eve's probably gonna break it stronger, and if Bitcoin doesn't break it, uh, he's probably gonna DonAlt: dump stronger. Uh. So, like, we might be back in the ethos, the leveraged bitcoin kind of trade.

Speaker A

DonAlt: Uh, I. I personally kind of like how it's setting up, but it does.

Speaker A

DonAlt: It's like it's just widely bearish. Still. Um, so it does need a little push. But when it, like, if it DonAlt: breaks that that underside retest, it starts looking quite constructive for the first time in DonAlt: a while. Um, yeah, I mean, Solana did this, Solana did the same thing, it did the underside retest. And then,

Speaker A

Cred: um, I mean, there are a couple of others right. Out of the investable assets, hype is, yes, exactly DonAlt: off, but I think if Bitcoin breaks out, Solana might probably do it too. But that one's a little bit more

Speaker A

DonAlt: of a stretch. Um, Cred: yes, dude, these charts haven't changed since the last episode. Um, I mean, Solana did its.

Speaker A

DonAlt: But yeah, yeah, I agree. Yeah, yeah, uh, yeah. You want to start a wrap, yep, bye, bye Cred: underside retest? Where it was like, Well, uh, if you want? The daily, that's fast, but the weekly Cred: is at resistance. Turns out the weekly was at resistance, and it's sort of ping-ponging. Um,

Speaker A

Cred: between, you know, 70 and 80 hype Cred: is also in the same place. The sort of daily range low we talked about, where the macro ranges Cred: between 55 and sort of seventies. Uh, you know, took a stab below reclaimed, which is a pretty

Speaker A

Cred: decent structure, um, but overall, like, uh, it's absence of weakness or some evidence of Cred: absorption as opposed to strength. Um, Zcash hasn't really moved all too much. It's still in Cred: this, uh, post-exploit choppy range, but in terms of again absence of weakness, it's still hugging

Speaker A

Cred: around the high. Um, so I think it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, it's, Cred: you know, um, which is, which is notable, but I think that's like, mostly it, this whole.

Speaker A

Cred: You kind of open up crypto at the moment and you're like, Yeah, it's kind of hanging on by Cred: a dick hair. And you can make the arguments about sort of levels and whatever else. But I think,

Speaker A

Cred: you know, absence of weakness, relative strength, but I think sort of volatility, Cred: death, plus summer seasonality really is the main theme. Uh, and then it's like, Well, let's see Cred: what, um, September and October look like. And sort of Q4 tends to pick up a bit. In terms of,

Speaker A

Cred: I think that's Cred: big, big picture. What's thematically interesting, like, if you spent your summer trading this Cred: chop? God have mercy on your soul. Cool, right? Should we wrap? Let's do it. I mean, Cred: hopefully we'll have something more interesting to talk about next week, which is definitely

Speaker A

Cred: when the next episode will come out. Because we are responsible, consistent stewards of this Cred: highly acclaimed show. Uh, before you click off, make sure to like this video and subscribe to Cred: the channel. Hope you learned something. If you have any preferences, either on format or if

Speaker A

Cred: you're on the internet, please let me know and I'll see you in the next episode. Bye Cred: more or less of this type of content, appropriate responses range anywhere from Shut the fuck up, Cred: you chart monkeys start drawing all the way to. Hey, this is actually quite useful and I learned

Speaker A

Cred: something. Please let us know, um, and we will adjust accordingly. Thank you to Kraken Pro Cred: for supporting the show. We kicked off the episode by sharing their gold and silver perps. Trading Cred: competition Um, that's worth a look, especially if you're on the smaller to medium account size

Speaker A

Cred: type of, uh, part of your journey. Cred: Well, you're looking for these sort of asymmetric opportunities. These exchange sponsored trading Cred: competitions, uh, tend to be far less competitive than you would ordinarily think. So, at least take

Speaker A

Cred: a look, if not, sign up to Kraken Pro anyway. If I I'll link to support the show, it's good.

Speaker A

Cred: Exchange been around for a while, positively paranoid about security. But a bunch of tools Cred: across Pro and consumer and all their other interfaces, so be sure to check them out.

Speaker A

Cred: We should probably talk about custody at some point, don, maybe next week, Cred: given the cold card hack, which we didn't even Cred: get to because we're too busy being pseudo intellectuals. Um, but I don't know what. Split

Speaker A

Cred: it across exchanges. Maybe a piece of paper with some friends and a multi-seed got them Cred: a multi-sig. Sorry, God knows, we'll. We'll sort that piece out later. Enough rambling Cred: from both of us. Hope you all have a wonderful weekend and we'll see you next week.

Topics:crypto tradingtrading mistakesBitmexperpetual futuresKraken Protrading competitionsBTC volatilityleverage tradingmarket psychologycrypto market history

Get More with the SozAI App

Transcribe recordings, audio files, and YouTube videos — with AI summaries and speaker detection. 30 minutes free.

App Store Google Play

Or transcribe another YouTube video here →

Free tools: TXT to SRT · SRT Validator · Merge SRT · Subtitle to Text · All tools