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Why Retail Gets Trapped - Skew on Order Flow, Altcoins, and Crypto Market Structure
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Skew joins the Insilico Terminal Podcast to talk about how crypto markets have changed, why trading is more competitive now, and how he uses order flow, market structure, CVD, OI, funding, and sentiment to find trades. We covered his early Bitcoin story, learning to trade on BitMEX, the difference between speculation and real trading, how large players create traps in the market, how to find strong altcoins, and what he is watching in the current macro and crypto cycle.
00:00 The story behind “52kskew” and finding Bitcoin early
09:07 Learning to trade on BitMEX and why price action comes first
15:28 Market traps, liquidity games, and how crypto changed since 2019
23:28 How Skew trades today: trend, momentum, and order flow
29:14 Using OI, funding, CVD, and footprint without getting misled
34:13 Speculation vs real trading, and the mistakes most traders make
38:13 Finding strong altcoins, sizing positions, and managing risk
46:09 Trading ranges, sentiment extremes, and market psychology
53:54 Market maker games, toxic flow, and reading large players
58:13 Current market outlook, macro risks, and advice for newer traders
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Transcript
Introduction to Skew and Username Origin
00:00:12
Speaker
Welcome to a new episode of the Insilico Terminal podcast. My guest today is Skew. is Is that what you call yourself?
00:00:24
Speaker
Yeah, pretty much. i mean my My username is kind of complicated. like where does Where does it come from? uh okay so the 52k part literally comes from a options bet some massive whale made in like october or november of 2020 somewhere late 2020. uh at the time it was seen as like a astronomically like insane bet right and i was like okay fucking yeah interesting
00:00:56
Speaker
yeah and then it played out. Like, i mean, I think the initial top was like 40 something. Then we went to like the fifties. So whoever made that and then held it to maturity, which I don't even know if ah there was a long enough maturity back then, but like insane bet in terms of price prediction from like 2020 to ah late 2021. Right.
00:01:17
Speaker
Crazy. and That's essentially where the name came from. um And other than that, I'm pretty uncreative. So I was like, fuck it,
Skew's Trading Background and Early Bitcoin Experience
00:01:27
Speaker
I'll just make it that. yeah and the skew part is ah like options and like delta related as well.
00:01:34
Speaker
And since obviously like half half of what I trade with is based or denominated delta, is pretty important. um it Yeah, it kind suits. I think it's ah it's a cool name. I didn't know it came from that, but that's kind of crazy. like Back then, Bitcoin was like below or something. Yeah, it was trading ah between 10 and twelfth care We kind of had like that...
00:02:02
Speaker
that bar like the classic 2019 bar which is basically price goes up goes sideways for like six hours and then just like plunges and like you know all the degenerate long traders back then would like open at the top then they'd get wrecked at the bottom um and then like after that we like actually did the parabola to 42 000 or something like that Which at the time was like crazy.
00:02:30
Speaker
Yeah. Would be it would be like terror terror now, nowadays to go back to 40k. See how far we've come in in the space since then.
00:02:41
Speaker
Yeah, it's it's kind of crazy. I mean, been here since like proactively since early 2019. I think like most people probably know of the others around the period of time that I started trading or at least dabbling with the, I think it was the Quatro contracts through BitMEX.
00:03:03
Speaker
ah Back before everything was KYC'd, the good old, you know, like Wild West days of people slinging hundreds of Bitcoin, not knowing that, you know, Bitcoin was actually going to go to 100k one day.
00:03:17
Speaker
Even though everyone still kind of presumed it would, you know. um Yeah, i mean I actually looked at TradFi initially, to be honest. like you know You hear from like the boomers all the time, and like most professional traders, you start with like it well trading, investing. There's the investing, which is you know ETFs. That's the whole normie path we're at.
00:03:44
Speaker
Or you know you buy tech stocks essentially. that That's been like the whole investing play game of probably 10 years easily by now. And then the trading is typically through like some brokerage which typically is it like you know futures contracts. And then like you know figuring out its futures it's like oh that's kind of cool.
00:04:06
Speaker
And then having known, most people actually don't know this, but I've known of Bitcoin since about 2012, 2013, which is when it was trading, like unironically, was shilling $1.
00:04:21
Speaker
I don't think anyone knows the story, actually. i'll think about it but i was i was shilling Bitcoin people my IT t class ah and when I was
00:04:32
Speaker
and bitcoin was like hundred and fifty two hundred bucks i think and i was like I think this is probably going to go up a lot. You should buy some. Essentially. And like obviously this back then, um like a lot of my friends, a lot of, I think, teenagers of that period were very, very big into like CSGO skins and like the whole gambling of CSGO skins and crates.
00:04:56
Speaker
and all that shit so
Cybersecurity Experience and DeFi Beginnings
00:04:57
Speaker
quite a lot of them did actually buy it it's kind of nuts because if you put like a thousand bucks into uh ptc back then you you would have got like quite a lot like decent amount uh especially today where it would be worth like easily mid six figs potential seven figs i mean if you're just kind of crazy yeah yeah um yeah nuts nuts So you already went into big Bitcoin back then, like as an investor at that age or just like sort as investment and bought some?
00:05:31
Speaker
Well, I did technically. I was also mining, which a lot of people don't actually know as well at the time. um and I think I lost the TANA BTC through some kind of hack as well. I forgot exactly what it was.
00:05:46
Speaker
It was some wallet provider. um I think like the the package someone injected like malicious, some kind of malicious stuff into it. and it like drained everyone. It was like one of the... It happened to NiceHash as well of like 2014 or 2015, something like that.
00:06:07
Speaker
At the time they lost a ton of Bitcoin as well, which would all be worth a shit ton today. Yeah. um But I wasn't like too big into it. I mean, at the time, like my whole prospect on the future and such was essentially going into cybersecurity and ah specializing and what would... Well, what's... I don't know if' still called it today, but like red team, blue team. like rep Red team is essentially...
00:06:33
Speaker
Your whole goal is to ah figure out ways to break into like a company's infrastructure. but but one is One is like an attacker and the other is defender basically, right? Kind of.
00:06:45
Speaker
Yes, yeah, yeah. So red team is attack, blue team is defend essentially. um yeah so that was like the whole prospect uh and then i did that for like a couple of years um like working tech and such uh got bored pretty quick and i started looking at like different venues uh and then yeah one thing to another led me to bitmix uh i think as well like personality culture also sort of the world i somewhat lived in made it quite easy to
00:07:17
Speaker
um get familiarized, I guess, with crypto as a whole. um Yeah, so I mean, it was a pretty easy transition. I mean, actually, technically one of the, I'd i'd have to dig up the paper that I wrote actually, but in 2017, I wrote a paper about cryptography actually.
00:07:38
Speaker
Oh, wow. And it was, I was actually looking, I think, Manera at the time. Something, I forget actually, but basically cryptography. So I knew like the the architecture quite well.
00:07:51
Speaker
of Bitcoin. And obviously by the time of 2019, you had ETH, because obviously the ICO, I think like two years before. um And ETH was becoming like quite a big thing. And then there was also DeFi protocols, which were building the initial rails for the DeFi summer.
Developing Trading Strategies and Market Understanding
00:08:14
Speaker
um but also kind of funny uh because d5 summer was also kicked off through things i think it was like yams the whole like food based d5 summer thing like sushi and all the rest they all did it for food based and it's very very typical of crypto because it's it initially starts with just pure speculation Like pure speculation of like the vertical upside of like this random thing, right? And then being able to capitalize on that. um
00:08:46
Speaker
Yeah, I mean, that's that's OG o ge crypto, I would say. Very, very different today when you have protocols like Hyperliquid and other like massive names of the time which have built actual like yeah business empires and such.
00:09:04
Speaker
And yeah, other the whole... abstracting of um friction points with like crypto apps kind of crazy actually to see where crypto has come in my personal experience the past like seven years what did your trading look like when you first started out like on BitMEX back then Oh man, i I went down like the typical route. I had like some understanding of um of trading.
00:09:31
Speaker
um I mean, i yeah I knew what like charts were, candlesticks, stuff like that. Like I, ah not sure if you had, but on the like old iPhones, um you could go on, they had like the the stock app, which was like the old black and white, where it had like the stock thing on it. I forget exactly, but yeah You could click on it and you'd see like a very generic ah chart, right? And that like always fascinated me, maybe for the for the pattern recognition part. um So i was already familiar and then obviously everyone used TradingView.
00:10:10
Speaker
um So I made the TradingView account, was like, you know, there's so many indicators, what the fuck do I use? you know so much shit right so i go on like youtube try to familiarize myself with like uh different types of trading i mean i tried you know the different like lines the the meme lines you call it meme lines if you want but you horizontal lines vertical lines the blah blah blah i tried that and the whole diagonal like you know sometimes it works but there's a whole lot of
00:10:43
Speaker
like what ifs, maybes. yeah it's It's very speculative. I didn't personally really like that other than I think higher time frame levels, like higher time frame levels where price ah tends to gravitate to it.
00:10:59
Speaker
So you'll see price like bounce off it or reject it yeah a lot of times over days, weeks, even months. ah Those levels are very important because they they feel breakdowns and breakouts, right? So that was...
00:11:12
Speaker
uh my initial i guess start of strategizing trading and building a trading psychology around that to understanding price action um in hindsight the first thing you do want to learn on is definitely price action uh and like structure and trends rather than diving into just random indicators and shit and like trying to strategize it um I mean, I wish I did that initially. Price action is like stuff like market structure, right? Like higher lows, lower highs. Yeah, yeah, yeah. Well, technically, yes.
00:11:50
Speaker
Technically, that that's like trend, in my opinion. Like higher highs, higher lows, like uptrend trend. And then the different types of, like, you know, what a certain candle means, like a doji.
00:12:02
Speaker
um the certain kinds of like wicks that you get and why it happens which is typically you know like you get a massive wick through a level and then price instantly reverses and that would for a lot of like early traders they get liquidated pretty easy on these moves because they either get swept out or they trade into it into like a key level like a key demand or supply in the market and they're like yeah it's gonna it's gonna move this certain way and then it doesn't and then they're like oh shit and then they double down on it and then they blow up an entire account right so i think you know learning these nuances when it comes to price action uh is extremely important extremely valuable um and then after that you can then strategize which would be systematic trading and that's we you build a long-term reliable system which in all regimes of markets um works with price action gives you confluence you know reasons to be in a trade uh rather than just like general noise um you want as much like confluence and abstinence as possible so like you want to be absolute in terms of being like long or short right
00:13:20
Speaker
So that, that is like moving averages, fantastic. Uh, and the cool thing is over over the past, it's the 10 years, uh, most algorithms typically use like VWAPs or some kind of moving average, which makes it like very respected.
00:13:37
Speaker
Um, Yeah, I mean, highly recommend systematic trading. And then like ah obviously on top of that, moving averages with like a momentum indicator of some kind.
00:13:50
Speaker
Then that gives you, you know, the the three confluence factors, like one price action and your key level and price trading around that. ah does this Does the market have enough momentum?
00:14:04
Speaker
uh you know is is you know unlike a lot time frame structure uh is the market trading moving averages uh with trend with like the higher time frame trend and all these things like mount up to your confluence of a breakout or a breakdown And, you know, and being able to add these together and then ah actually take action can be very, like, rewarding, honestly.
Professional Trading vs. Speculation
00:14:32
Speaker
ah Even as, like, simple as it sounds. How long did it take you to get, like, a good understanding of all of these things? Or, like, a good grasp on them, the the mechanics?
00:14:46
Speaker
I think, okay, so, like, the basics, like, price action levels. Um... probably like three six months, if not like somewhat instantly.
00:14:57
Speaker
won't say completely instantly because you're always learning In terms of like how price reacts or something. Because there's a shit ton of like fake outs in the market. Like a ton.
00:15:09
Speaker
Like all the time left, right, center. um On top of that as well, like without how I trade now, I understand at like a very deep granular level of of why the market is actually trading or reacting in certain ways. Mm-hmm.
00:15:24
Speaker
And that often know it leads me to realize that there's a ton of traps in the market. And it's it's more of a liquidity game now. and um Obviously hindsight as well with that.
00:15:38
Speaker
um but what What do you mean by traps? ah Like a typical trap on the market, at least today, is you'll have like a a very liquid area on the market, which is typically, you know, called like demand or supply. That's essentially where price trades into a highly liquid area.
00:15:58
Speaker
um And this is the most opportune time for big buyers to show up or big sellers, right? So that's why you got those massive like rejections or like massive vertical moves depending on what's going on. Like narratives are extremely important in our crypto.
00:16:16
Speaker
Without a lot of narratives, you don't really get price movement to be honest. You just get chop. um Which is kind of funny because you'd assume for like a mature asset, they'd be able to trend natively by themselves, but they so they they still need narratives. They still need to encourage buyers or sellers to do something.
00:16:37
Speaker
um Yeah, so a trap is essentially the market looks really good at a certain area or really, really bad. But if you look at a granular level, you see that you know there are massive, massive players that are taking the other end of the trade.
00:16:55
Speaker
uh so like that that gets nicknamed the traps like uh take yesterday for example uh the market was essentially being pushed up by like one probably one person one firm just aping into a bunch of longs which was able to move price during typically illiquid hours which is ah the the end of a weekend, like a Sunday, ah into Futures Open, which goes into typically like a a weekly open.
00:17:25
Speaker
And typically the the reason why they do that is to convince the market of something. So then it sort of becomes kind of like poker, right? You have like a poker face. They have that poker face of ah convincing the market to buy, right? um And a lot of people started buying actually.
00:17:42
Speaker
and they essentially use that liquidity right to sell a shit ton of bitcoin and that's why you saw a more not typical rejection but like a quote-unquote rejection which is essentially one player move price manipulated the market higher sold into the market or the the new buyers uh and then that was their trade and then they basically you know they they they fuck off or leave right the market has to figure out what's what's actually going to happen next so so basically they're like in a in a long position or they're like holding spot qui bitcoin or whatever from maybe earlier lower prices and then they use the liquidity of the of the weekend to like push the the market because it's like takes less amount of money to do that during illiquid times and then they sell to people when it's like more liquid and they got like basically baited into buying at these higher prices by these players that wanted to offload from earlier yes yes yes um yeah it's it's today it's a like liquidity game market
00:18:48
Speaker
I mean realizing that's pretty important I think because How is that different from ah from back then? Like how did that change? Well, the market back then, ironically, was more organic, but it was very illiquid the same time. um Like take how bitcoin Bitcoin traded during, I think 2019 was very, it was pretty, pretty organic. So you had like the massive blow for 2018, right? From 20K down to like, what was it?
00:19:15
Speaker
six go three or six, yeah, some of that, I actually forgot. ah But then essentially you had essentially no movement after the, the, the, the price crashed essentially.
00:19:28
Speaker
um And then you had a gradual then pretty rampant move as Bitcoin does from one extreme to another extreme.
00:19:40
Speaker
And typically during these these these changes in the market, it attracts a lot of attention. ah And the interesting thing was back then is it attracted more capital shops, which were then set up to actually, i think, trade Bitcoin with proper risk management.
00:19:58
Speaker
ah same Same as market making as well. Like I think market makers back then dominated quite a quite a lot of like the OI as well as like volumes and stuff like that.
00:20:11
Speaker
But the retail audience, grew like exponentially from 2019 up to 2021 that's that's why like bybit did extremely well because they they timed their entry to the market um very very well yeah they
Market Evolution and Institutional Influence
00:20:26
Speaker
caught uh like the largest bull run well the largest like retail driven bull run ever uh which was essentially 2019 to 2021 yeah
00:20:41
Speaker
and then um
00:20:44
Speaker
Yeah, and then like basically after 2021 has become a lot more institutionalized. I mean, ironically, like all the institutions that jumped in ah during like probably 2021 mostly, ton of them blew up, correct. They put crypto style, right?
00:21:01
Speaker
The ones that survived then entered more from 2023 onwards. And a lot of those shops had more altcoin exposure.
00:21:13
Speaker
Because like the the the hidden secret is the generational wealth in terms of multiples is made off a certain altcoins which have a good runway.
00:21:24
Speaker
hu ah Like they've raised capital, they have to use, they're building something exponential which has fee generation, attracts daily active users, kind of thing.
00:21:36
Speaker
very obvious vertical upside for the token itself yeah um take like hype today that's why a lot of investment is piling into hype uh all the time really um and that's that's kind of why it maintains its value it may have not gone up exponentially yet like b&b kind of uh style um but but that's essentially where like crypto is at
00:22:03
Speaker
And but what is like ah the difference nowadays if you say like, is is that something that didn't happen back then? Like what you just described, like this weekend price action where someone just like pushed the price a bit higher and then tried to like, or did offload into other buyers by like abusing the liquidity?
00:22:22
Speaker
ah was that maybe it it something that happened like every day back then because it was like every day a lot less liquid than it is now? It did happen, but it definitely wasn't as frequent, I think. i mean, I think today, a lot of price action dominated by probably more high-frequency systems.
00:22:42
Speaker
So, in a like, yes, institutionalization of Bitcoin made our coins go up and everything like that. So that's like the quote-unquote blessing.
00:22:55
Speaker
howva However, however, right? the the dark side of that is it became extremely competitive now. So if these very, very small, like quantitative firms, which more often can easily reverse engineer people's positioning from data, um they can basically work out where they can get a liquidity grab on the market. And they'll do it obviously because it's profitable to do so. Whereas like back then, um i think the,
00:23:27
Speaker
I mean, yeah, it's it's historically very profitable to do that. It's been shown in Trayv5. But back then, participant-wise, the pool was extremely small compared now. I see. Yeah.
00:23:40
Speaker
It's just so so's business, as they say. what what does What does your trading look like nowadays? What sorts of stuff do you do you look at to enter a trade? What sort of time frame do you trade over?
00:23:52
Speaker
What tickers do you trade?
00:23:56
Speaker
Honestly, it really depends on the market at the time. So if if the market is early, early like bull trend, uptrend, right? I'll be looking a ton. I spend a ton of time at like screening sectors of the market. So seeing what what coins and tokens have relative strength to Bitcoin, ETH, Solana, basically like, you know, actual sector trading, which pinning tokens against their their major token.
00:24:24
Speaker
um And then essentially looking to trade the obvious easy momentum caches. and Because cause obviously on those moves you can you can materialize like easy gain on like ten x leverage, like ah That's an extremely easy way to grow your account, just by doing like nothing essentially.
00:24:50
Speaker
um But the the the nuance with that is we we make the assumption that massive buyers are going to come buy everything, right? Which these massive buyers all use algorithms, right?
00:25:05
Speaker
And me knowing that pushes me more into like order flow trading, which is specifically using um like you know, KaiToker being one, which is essentially where I can see the the actual liquidity specifically. I can see a price trades into that. I can see the delta, the volume traded there, the imbalance too. So I can see if there is a passive buyer or like Iceberg buyer seller, which is essentially with with Iceberg buyer sellers, price goes sideways.
00:25:35
Speaker
and then just like makes a massive move and typically during that you'll see ah like divergences which is like you know cvd goes down a lot or a lot ah or up a lot but like prices uh basically no momentum it's momentum dies right and then goes the opposite direction um there's some like really really fantastic trades in that on like a little time frame for like a scalp um but like for like swings not really that important um unless that is a um a kind of end of trend move like take take the the move from like november of the election like 2024 right then we you know we we basically went vertical off that's that narrative right
00:26:25
Speaker
And then we sort of grinded higher for a while, but we had a lot of like momentum being lost um clearly over higher time frame.
Current Trading Practices and Strategies
00:26:35
Speaker
And then we had that big pullback.
00:26:37
Speaker
um And then that was like the reset essentially. But it it didn't change like the higher time frame structure or or trend. um So, yeah, I mean, a lot of my trading my a lot of my trading is trend-based today.
00:26:52
Speaker
ah Momentum-based, like, fundamentally, right? um And then on top, I use systematic trading, like what I what i mentioned earlier. Like, I use um ah RSI as a good filter for, like, momentum. Like, above 50, it's like shows momentum, but, you know, it does it.
00:27:08
Speaker
ah does it have the right elements which is like does it have know true organic buying at a price or is this just you know one buyer moving price up if it's just like one buyer moving price up that's an opportunity to you ride it until they're not buying like you know sailor and then short it basically um so i i would say like the long term kind of focus is
00:27:34
Speaker
maintaining the the annual like yield I want, which is basically like maintaining my my my monthly or quarterly return by essentially
00:27:47
Speaker
Whenever there's like a bullshit move in the market, obviously I'm going to take advantage of that. um Because I mean, why not? It's serious on the game in the end. It's Uverse, the massive trading firm, which is obviously ah going to prioritize their profits. So you might as well do the same.
00:28:07
Speaker
Which I mean, I will say, to be honest, that that's probably solely driven the increasing like toxic flow in the market, which essentially means you have like one massive trading firm which is trying to be the whole market. And then you you get a second firm that comes in and piggybacks off it Then you get like a larger, like a way bigger firm that's just like, ha ha ha, fuck you. And then like dumps on them and like aims to liquidate them.
00:28:38
Speaker
Um, but they They won't like randomly do it. It's it's all very strategically done. Like take FOMC. If they know the outcome to a certain probability. Yeah.
00:28:50
Speaker
You already know they're going to target liquidations in the market. ah Because liquidations essentially generates volume. And it also generates liquidity. Yeah. So they they are typically the creators of liquidation liquidation moves in the market, right?
00:29:07
Speaker
But they're also the big buyers of it too, all the big sellers. So that they are the the large entity that is over time actually moving the market.
00:29:19
Speaker
And you're looking at like CVD and and other order flows to like basically piggyback onto that? um Yes, yes, yes. um I will say
00:29:32
Speaker
like two two general indicators which a lot of people yap and yap about but don't don't know how to utilize is like OI and funding.
00:29:44
Speaker
Right, it's like the funding rate is not like an instance true value, value right? ah It'll change over the the period of those eight hours essentially, right? And then it resets.
00:29:59
Speaker
at the the rate the average rate of the past eight hours room um and then there's OI right so if you if you get a like a lot of like shorting of the previous period OI and the next period is gonna like become negative but but if you see that uh exit yes yes yes it's the funding rate the funding rate um Yeah, it's it's kind of mean. So it's like it's useful, but delayed.
00:30:28
Speaker
so the way to use it is by looking at the direct positioning itself on the market calculated in rough terms of Delta. So like if there's a ton of shorting, there's there's typically a negative delta to that. But it should show up in funding rate layer later, which is basically negative rates or lower rates.
00:30:49
Speaker
um Then if you use like footprint and well, yeah, mainly footprint, ah you can basically see it essentially. um Like if they're shorting into market, it'll be like negative, negative delta.
00:31:03
Speaker
if they're passively doing it which is through limits um you get a pretty consistent same value like like two million two million two million like positive delta which literally just shows you that they're just like shorting at this price that's their average price and they're scaling right um Extremely useful to know because you you can catch moves before they even start just by seeing that.
00:31:27
Speaker
Just by seeing like the massive player's position into something gives you a time window, I don't know, like minutes to hours sometimes to basically position.
00:31:39
Speaker
And it's extremely obvious on like altcoins. Like if you go look at like Zcash, you you can literally see like one whale or a group of whales that are moving the price like 10, 20, 50%. Like, know, just here and there essentially.
00:31:55
Speaker
Does most of the DEXs, I think, have their funding rate every hour instead of every eight hours. Is there like a change of dynamic in that, that you can like see the effect sooner than on centralized exchanges?
00:32:10
Speaker
ah Definitely, definitely. but it But also, I think it makes it more noisy. like I primarily use Binance's data um because I think it's the least noisy, but also most like massive MMs and firms trade primarily through like Binance.
00:32:29
Speaker
um Coinbase, sort of, they they actually use the institutional, which is like a different book. um and then And then like Hyperliquid more now. um But a lot of like the data that you get from like Hyperliquid is, i mean, it's kind of funny. It reminds me a ton of the early days of using like a software called Bookmap, which is basically like a really old ah heat map tool. And you could see like, you know, the the XBT, USD charts.
00:33:00
Speaker
And but you basically just see like random dgens just like yellowing in the price all the time. So it kind of like it's funny to lock out, but it's not like really objectively that useful.
00:33:12
Speaker
unless you do like massive filtering which some people do that through like cvds which is you filter by a certain uh size which is like you know 100k one mil five mil or at market or sold at market and then you like compare that to price action which um you you can use it to trade like momentum which is typically driven by like you know market buying or selling Or on the off hand off the ah in the you can see what I call absorption in the market, which is um a lot of volume and a lot of delta is traded at a level, right? But it's not driven by market participant. It's actually a passive seller or buyer essentially gobbling up everything, right?
00:33:59
Speaker
And then that that's like single handedly the number one ender of trends. is You get this massive a participant that's like, all right, yeah, this move has gone on long and enough. Well, I think this is too expensive or discounted.
00:34:14
Speaker
And then they they they essentially um start deploying or selling, yeah start deploying capital or selling the their inventory.
00:34:25
Speaker
When looking at all this stuff, like what are some ah mistakes that people maybe make or some like misconceptions that they have if they're not as sophisticated or what i don't i don't know what the better word is? So if they're not as familiar with these tools, what what are some misconceptions that they like have when they're trying to use them as someone that is like quite proficient at using them as yourself?
00:34:50
Speaker
Uh, think as simple as it is, they they take it as absolute, like at face value, like, and this is a common mentality actually. And I know why it's because a lot of people see an in indicator, right? Like RSI, uh, moving averages, a lot of the in silica ones, which are like very good, but a lot of people don't know how to use them.
00:35:13
Speaker
Mm-hmm. They just kind of take it as like face value face value. And they don't really have an understanding of, I think, how to trade professionally, which which essentially just means how how to actually trade rather than just speculating.
00:35:29
Speaker
Because if you're speculating and you're using all these tools in the end, you're not using them to their full advantage. right you're not You're not really gaining an edge in the market.
00:35:40
Speaker
um Yeah, I mean, as simple as that. I think like number one, the mentality, right? Are they there to speculate and make an easy buck? Like unquote, obviously it's more difficult than that.
00:35:53
Speaker
Unless you tie the market really well and you just wanna like YOLO on something that you think goes up or down, right? And then second point, actually be researching what what like you know RSA is, what CVD is, what what Delta is, what ah BIO cell volume is.
00:36:12
Speaker
So you actually have to um study and train your understanding and then test. Definitely test before you you utilize anything in in the actual real terms of trading real money.
00:36:30
Speaker
what What is the difference between speculating and real trading? ah Speculation is essentially you don't have a plan or a strategy in my opinion. You're basically like, you know, this chart quote-unquote looks good or you think ah this narrative or agenda is going to be good or bad for the the token and you trade it solely off that.
00:36:52
Speaker
right Actual trading essentially means, you know like I said before, you you have certain parameters, certain like rules as well. So you have like a checklist. like Mine is, I check price action, I check structure, I check the the trend, I track i check ah my systematic ah confirmations, which is trend following indicators essentially.
00:37:16
Speaker
And then on top of that, id I check yeah the the ah The other side, which is, you know, am I just being led like cattle to a slaughter, right? Which is essentially the order flow part.
00:37:29
Speaker
but That's like my final confirmation that there is true buying or selling or true organic momentum that is building. So it's it's kind of like, in the end, the utilizing market data is the truest form of trading.
00:37:46
Speaker
Because you can see specifically who's buying what, how much, where they're buying, and then you can connect all the dots. You know, are they they're buying off news? they buying off speculative narrative?
00:37:58
Speaker
ah Is this speculative narrative ah potentially profitable in terms of offside? and then Like, you know, so on and so forth. It should... snowball into a very concise, solid trade.
00:38:15
Speaker
Consult the market about the market. Yes, yes, yes. I mean, if you're going to trade against the market, that's a whole different degree of expertise, I think.
00:38:27
Speaker
I want to ask a bit more about how you mentioned earlier that um I guess that's obviously almost everyone knows the most returns are in in like altcoins and they're multiples and then you talked about how you scan the different sectors to find the proper coins to to long pretty much.
00:38:44
Speaker
And I want to ask a bit more about how, like what exactly you look out there for to like find the the correct coins and not be like stuck in some random thing that won't go up with the rest of the market.
00:39:01
Speaker
I mean, pretty good question. it It also depends. Like newer tokens, I think are harder because it's more speculative, right? There's not really that historical um data that you can use.
00:39:14
Speaker
So that that I think is more narrative-based trading. um Typically when I trade that, I actually have like a trailing stop loss, which which is based off like VWAR.
00:39:27
Speaker
ah So essentially i can I can capture the upside of the move um and then like yeah when it eventually reverses I just get stopped out and profit. And then I essentially just move on and and like don't give a fuck for, i don't know, a certain period of time. Because like obviously each token, each new token has its like ah time period where it goes up. right It trends and then this usually unlocks and various other factors which act as supply.
00:39:55
Speaker
um and then And then obviously the the asset will go back to its equilibrium and then you can trade the second move of that, which is, you know, it goes up again. Sometimes higher, sometimes not.
00:40:08
Speaker
um But beyond that, I then go through, like you can do it with AI now, um like I'm working with, ah like, you know, like Star Child, True North, and um essentially the, in the end, I'm going to get both to um optimize in terms of providing, I think, true
00:40:34
Speaker
how do we call it? Like quick trading solutions, I guess, which would be like, so you have a scanner, right? Most do it backed in like Bitcoin, ETH and US dollar, right?
00:40:48
Speaker
okay But in actuality, there's so many tokens. you You have like massive token dilution now, like too many tokens. There's too much shit to watch and it's very difficult to scypher at all based on, right, to even like start.
00:41:02
Speaker
and So what I'll do is identify a sector of interest. So like you could, i don't know, just type in AI like... um sectors that have, well sectors and tokens that have performed better than Bitcoin in the past 30, 60, 90 days kind of thing, right? And you start that. And then you go from that to the charts and you essentially look for ah tokens which have reclaimed key high timeframe levels like the like one week lows is very important.
00:41:33
Speaker
or they've made a higher high on like a one week or a one day basis. On the one day, it's typically more initial, like ah the transition but from a higher timeframe, like down or uptrend to next the next higher timeframe trend.
00:41:51
Speaker
um So like that's usually the best time to get positioned because you can catch the the bulk of the move, right? um And yeah how I basically signify trade from that is then, you know has it reclaimed like four hour 50 or four hour 200 emaze?
00:42:12
Speaker
or well I use four hour on the one day typically. And if it's reclaimed both, then that's like, yeah, I'm in essentially.
00:42:22
Speaker
How much size do you put into a coin or how do you decide how to size?
00:42:28
Speaker
That depends on if I'm early or not. So if I'm early, I can scale essentially over time. um so that I mean, I've been asked this, like, you know, some people use like nominal position amounts.
00:42:44
Speaker
um Some use like a percentage portfolio. i my ah Like if I'm trying to catch, for example, a massive trend, like a start of a higher timeframe trend, right?
00:42:56
Speaker
I'll do the sector thing and I'll i'll pick my my um my coins, which I think will perform worst or best in terms of you know being like net short, net long, right?
00:43:08
Speaker
um I will pick those and then I will scale. So I'm like one to 5% total portfolio in like each, like early on.
00:43:21
Speaker
And then like basically over time, my portfolio is like 50% like alts. And then the the rest will be 50% typically. ah btc typically and because I basically want to capture the upside that's typically always driven by Bitcoin initially.
00:43:38
Speaker
But on top, I want to catch the, you know, the 2 to 5x or 10x, which is driven by all these other tokens. So that 50% can become like, can be becomelike a you know return of like 25 50 50x on my total overall like portfolio ah but I will say do not do that if you are new to trading because it is a royal pain in the ass to manage the amount of risk associated with that it's it's very degenerate but if you know what you're doing in the end ah like for instance if some of them are like um on the verge of at least
00:44:17
Speaker
like on the verge of like risk, which is basically, uh, like ah they've lost their gains, they're going negative. And if I know it's a certain pullback on the market, which is off news based, I will cut a shit ton of exposure, evaluate, uh, and then like, uh, either cut completely or double down.
00:44:36
Speaker
it It really, you know, depends basically on how the overall markets, uh, move. Um, and, and, ah and actually with that, um,
00:44:49
Speaker
like war as a whole is an interesting when it comes to trading to be honest because at the same time initially it's like massive risk if you have margin in the market and trade fire firms hate two things risk volatility so if you see an increase of both they they tend to shit themselves right that in itself can become an opportunity but i think a lot of people don't know how to time that that that time horizon right um Yeah, that's that's that's ah an interesting one actually.
00:45:24
Speaker
Because with like the time horizon, right? You need to know how much capital you're deploying, what kind of return you expect, what kind of return you need to sustainably make a profit. And if you sustain any kind of loss, right?
00:45:40
Speaker
How do you make that back? okay um And I mean, one of the quickest ways to make back is, you know, full like lock-in mode and like trading the trenches, which is essentially just like scalp trading like a demon, right?
00:45:58
Speaker
You just like lock-in. It's ridiculous. ah It's very time consuming. It's like, you know, anywhere between like... like five or ten hours a day of just like raw, you know, five minute, like like literally one minute or five minute shot, just like scalping stupid size.
00:46:16
Speaker
um Also would not recommend that if you're a retail trader. is is Is that what you do when there's like when there's
Market Psychology and Sentiment Analysis
00:46:24
Speaker
no trend? I wanted to ask that earlier because like you you talked about trend trading mostly, but most of the time markets ranging. So that like what you do when the market is ranging?
00:46:35
Speaker
When they're ranching, honestly, um yeah, mean, it's pretty simple. just trade the ranch. It's like you basically define it. You see where process has reacted certain amount of times. um There's always, like in these ranges, like a couple times where they like blow out.
00:46:53
Speaker
Which is basically like price extends a little better than usual and it targets all that trend all that like range positioning. um Hence where you get like the whole sweep, it's pretty thin, then reverses in like literally five minutes or something like that, right?
00:47:10
Speaker
uh sharp moves like that like really sharp moves some of the best shorts like ever or like longs um i think probably as short as of recently because i think since like october that that one like wipeout and like alts on finance through that exploit i think spooked a shit ton of uh people and mms so then like you haven't seen the same response to the long side I mean, I would say it's kind of returned as of like recently with like a lot of these low-time frame lows.
00:47:43
Speaker
like It seems like you have that proactive buyer again. I don't know who it is. think it usually happens when there's a big leverage wipeout. I mean, 10-10 was obviously kind of special, but even before when...
00:47:56
Speaker
there's like this exuberance in the market and then there's like this one day where like majority of participants get wiped out everyone is kind of like scared for like a couple of months or something to really get back in there again and we have like this reset and then like slowly it's like basically this this market psychology chart a bit you know where it's like yeah yeah yeah whole i like den denial or whatever and then like don't know what the next steps are but the way it like goes up and people become euphoric again and stuff like that
00:48:24
Speaker
Yeah, sure, sure. I do agree. I'm speaking on that, actually. um
00:48:30
Speaker
Being able to trade on like market psychology, so that's like everyone's euphoric, everyone's very pessimistic, right? Way more difficult than people think, for one. A lot of people think you could just trade off that, not true.
00:48:44
Speaker
ah Because if yeah if Bitcoin has gone from a high timeframe uptrend and is now going into a downtrend and everyone's pessimistic, you know they're actually probably right on the end. right and then a lot of people will log way too early and they get wrecked in the initial like down move like absolutely like wiped out right whereas if they just looked at the chart and like literally just went to it like a one week and looked at the historical levels um they would be able to see roundabout you know where you would expect a massive move from the market like as of like currently a lot of this this up move is essentially off the highs of 2021
00:49:26
Speaker
um which which is really like no surprise uh to be honest but a lot of people were like really pessimistic at the bottom um or the bottom low whatever you want to call it right um that was a buying opportunity right but when a lot of people were like you know pessimistic earlier right like earlier in the year um that wasn't necessarily like, you know, you should go out buy. it's It's more like, you know, evaluate the structure and trend, which was, you know, leaning down.
00:49:58
Speaker
And you'd rather just then, you short, way overvalued like shit coins and alts instead, and then just sit on that basically. I think you could say, like, it just occurred to me, but it's also, I
Insights into Market Manipulation
00:50:11
Speaker
guess, kind of obvious. So, like, um momentum and sentiment are, like, very correlated in a way, where it's, like... You are correct, yes. With these rules of, like, ah like the the new person or whatever will always say, like, if it's oversold on the RSI, then you should buy, and if it's overbought, then you should sell. But that that indicates, like... That's one of the funniest memes.
00:50:32
Speaker
that That indicates that there's like a lot of momentum either to the upside or to the downside. And sentiment is kind of the same. like when When people say like on these days when there's a 10% down date and there's like a a lot of negative sentiment, but also lots of negative momentum, and it seems very bleak, it seems like it's the bottom, but it's just like there's more fuel to the downside because we're in like a bad...
00:50:55
Speaker
time and it's it's the same on the upside like if it's always with people saying like hey there's like a top signal like something very retarded happens twitter or something and then it's like yo this is a top signal which it is but there's also so much momentum that we still keep going until we get to a point where it's a bit more like momentum is like slowing down there's a bit more consolidation there and then it's like the actual top or like the actual bottom and the sentiment there is also still like kind of euphoric but like Or kind of like, like sentiment on the recent bottom is like bad and it was very bad, but it's like always, it can always get worse. You always need to like kind of wait for a sentiment like reset a little bit, kind of like the same as you do with the momentum oscillators. That's true. That's definitely true. Like when you see the extremities of that, which is like people are literally saying like it's over or, you know, we're going Valhalla type shit. um
00:51:50
Speaker
You want to look at positioning too. yeah Like if if you have like so much degenerate positioning and the market can't actually break through a level, that in itself is is right before the market reverses every sector.
00:52:06
Speaker
Like I haven't seen that signal change or fade in like five years, I think. Yeah. that That and that, and like it's always driven by something. Like ah the initial top was the Coinbase um IPO, I think.
00:52:24
Speaker
Yeah, yeah, that yeah. Yeah, yeah. I forget what his name was. ah Fuck, there was a really good big trader that called it like to the T.
00:52:36
Speaker
ah Shit, I forget his name. But yeah, anyway, there's been like quite a few of those. Yeah, he has like a picture which is like a roller coaster and like the roller coaster gets smaller and smaller.
00:52:50
Speaker
No, no, no, not Rookie. But didn't he also have that PFP? But who was that? Actually, I don't know. But you're right, it it was was the same in in like 2017 or something.
00:53:02
Speaker
Yeah, 2017. Because like the the top was when the CME Futures got released, right? Yeah. Yeah.
00:53:11
Speaker
Also, convenient that ah all the exchanges went down for that. Very convenient. Yeah. Classic. As usual.
00:53:22
Speaker
yeah. man. Don't get started on a the Binance listings. I mean, it's kind of funny because it's it's been on the timeline a lot lately. where like And it's true Whenever a token gets listed on Binance, they typically want to...
00:53:36
Speaker
large percentage of supply and then they ah they have internal desks and they tend to you know then sell when they see the global ah long percentage of this token above like 60% and they just like sell it on you.
00:53:51
Speaker
I mean, crime is legal, so...
00:53:55
Speaker
is the The president is probably in support of that, so I guess he can pretty much do whatever you want. But it's good for us to like benefit of that and then we need counterparties and all that. But yeah, it's it's a bit silly. Yeah, yeah, true. I will say like I get bored during range trading, so I like to play the game of chicken with like whatever large MM or like firm is is active.
00:54:20
Speaker
like I'll like occasionally just kind of like poke the MM and see if they do anything. And like I find quite often, if I do that enough, some algo will come out of nowhere and just like market a stupid amount. and then they got Like on on Bitcoin or like on these random shitcoins?
00:54:37
Speaker
um Specifically Bitcoin, but you can do it on alts. It's, I would say, a lot more stupid on alts. I think they tightened a lot of the the profiles after October.
00:54:48
Speaker
Mm-hmm. For obvious reasons. um But what you could do like before that was essentially you could trick these algorithms into buying equal to your size, essentially, because they want to like outbid you to make you buy higher.
00:55:04
Speaker
They do the same to the downside, and then they utilize you as liquidity. So it's like a like a game of hot potato, in a way. Yeah. um So yeah I mean, you can basically just you manipulate the algor to buy and then you just like dump on it.
00:55:20
Speaker
And you can just do that perpetually on like all these shit coins. Like when when you see like firms like DWF coming to the scene, right? And they they have like a more of directional way of trading as a market maker, which I ain't going to go into the ethics of that or anything like that.
00:55:36
Speaker
um If you know, you know. I'll just leave it at that. ah But yeah, obviously when they come in, it's really obvious and not a surprise in what they can do with a lot of like these low float or high float even like shit coins and ults.
00:55:53
Speaker
You can move them like a stupid amount. And then when they attract a ton of ah volume that isn't them, because they they they tend to dominate like 85, 90% of the volume. And then one once it dilutes back to like, I don't know, like 60, 65%, they'll just like straight up be like, okay, time to exit.
00:56:14
Speaker
Or time to buy. Perfect. Yeah. They didn't give a fuck. I kind of wanted to give like a a little bit of it retarded diplomatic statement or whatever, of being like, yeah, this is... ah I don't know. Like, this... Instructural Terminal is neutral to towards every exchange and all of that stuff, but like... It's actually so silly that all of these practices are like so widely known and like public nowadays. it's just like Everyone just knows this. This all going on. there's like It's not even being hidden anymore because the administration in the US just like supports doing whatever you want. So we can all just like do all of these things. We weren't really like allowed to do before, but like it's just normal parts of the market now.
00:56:57
Speaker
In a way, yeah, yeah. Everyone knows. Everyone's, like when it came to like DWF shenanigans, uh, every, I think shop, like trading shop knew. Yeah. Uh, some of them took, took advantage, some of them did, and they got wrecked and then they would go on like a vengeance, like a witching hunt against DWF and like every other token they positioned in and it would create like complete chaos in all I think it's just funny where it's like a couple of years ago, i feel like this this was kind of said a bit more ah behind closed doors or whatever expression you want to use. And nowadays it's just like 10,000 shit posts about this are on the timeline right when it happens.
00:57:32
Speaker
It's just publicly available. A lot of like my following, I think initially came from basically pointing out um what like large players are doing. Yeah. And like, you know, how you can basically utilize that in terms of trading or profit on it.
00:57:47
Speaker
Kind of, you know, when there's like weird shit, you basically avoid these tokens, right? Whereas like now it's like definitely more normalized boook because I think people know how to use ah not just like indicators, but like market data ah to like sniff out um insider trading, weird market making, directional trading, like you name
Market Outlook and Future Preparedness
00:58:13
Speaker
it. It can all be done pretty easily now, especially in like the vibe coding days where you can like mark well literally you can build like a terminal in like 15 minutes now.
00:58:25
Speaker
What's like your your general general outlook on on the market right now? and in like Where we are in the market structure cycle or whatever?
00:58:36
Speaker
It's kind of interesting because whenever I look at like the total three chart, which basically benchmarks alts, I think it looks pretty good. It looks like a bottom to me. um However, it entirely depends on big Bitcoin because Bitcoin's the king in the end, right?
00:58:51
Speaker
Yeah. Whereas Bitcoin did bounce off the 200 EMA, the one week, as well as the 21 highs. Yeah. um as well as ah the twenty one pies um Which I think is like significant. It makes sense to to get a massive move off this rip.
00:59:11
Speaker
But the one thing that lingers in the back of my mind is to be a little bit cautious because if this turns out to be just a massive bear market bounce and it makes no difference in terms of the higher timeframe, right? Which essentially means a lower higher versus reclaiming structure higher and establishing a like one week higher high.
00:59:33
Speaker
okay um And if it does that, then I'd be, you know, Omega bullish because then at that point, you know, we could probably run to like 200, 250K, right? An insane kind of blow phase. um I would say I'm like optimistic.
00:59:50
Speaker
I want to see what happens essentially. Mm-hmm. I think Tradfire is fucking nuts at the moment. Yeah. Like absolutely insane. um I think a lot of the lot of the reason why like features move so much is um There was a ton of capital, like it it wasn't really reported that much, but there was so much protected capital, like a lot of capital going to protect other capital, right? So it's kind of like the canary in the coal mine.
01:00:19
Speaker
yeah With this like global shorting, right? Because of the US Iran shit. And then like when that was all basically forced out at premiums constantly,
01:00:31
Speaker
it forces this massive uptrend, right? And I think that's all been blown out, right? I don't think it's entirely actual buying for higher prices. ah So what I'm kind of looking at is like, you have the case of reality, which is like, the world's not really over yet. They're just kind of fifth faffle, you know, swinging the dicks around, doing the the whole big dick contest of who's the the the biggest man, voh blah, blah, blah, blah. It was the pointiest stick.
01:00:58
Speaker
Stupid shit. um I think it's very important to see that resolve on a long-term basis. ah Because the the market presumably has priced in that already, right? um I think half and half.
01:01:13
Speaker
I think there'll be a lot more upside if there actually is a long-standing resolution. Mm-hmm. um And then there's there's also the case of you're going to go into it, ah oil trade normalizing, inflation coming down. I think there's likely an inflation emergence which is going to come out, which is basically inflation comes back with a massive vengeance across like multiple different a commercial consumer um ah factors.
01:01:43
Speaker
Because obviously petroleum is fucking everything. It's affected things like plastics, rubber even, agriculture. I mean, farming is law a whole different crisis.
01:01:57
Speaker
So that's just like one thing that'll fuel inflation more. So that that's the backdrop that I'm looking at. Is say, you know, we get a massive wave of inflation. It spooks central banks. I mean, it's kind of happened here actually in ash Australia. It's moved central banks into the old the CBA to basically, well actually RBA, not CBA, the RBA into hiking, right?
01:02:22
Speaker
And the funny thing is when that ends, when the inflation book basically normalizes back to what it was before, They'll be at higher rates. They'll have lower growth, which is speculation.
01:02:33
Speaker
And then they kind of realize, shit, what next? And that's typically when things actually fundamentally break. um So that that is also on the the macro backdrop too.
01:02:49
Speaker
So while things are good, I think, yeah, run up your accounts, whatever, take advantage of the markets. ah But when things get up pretty bad, look to buy real assets like, you know, discounted property, land, yeah gold, those kinds of things.
01:03:09
Speaker
I think
Advice for New Traders
01:03:10
Speaker
that makes sense. I was just going to swing into the into the last ah little segment. If you have like any any advice for people that you want to give, I guess you already like kind of kind of started off there a little bit.
01:03:24
Speaker
I mean, if they're like, like, as in if someone's starting to trade, they're just kind of walking around. Yeah. um I mean, I think like, honestly, start just with Bitcoin. One, because it's liquid. It has decent momentum, but it doesn't have a lot of, like a lot of volatility. Like you see in like alts where it's like kind of hard to maintain that risk and it's very easy to blob.
01:03:48
Speaker
Yeah. Learn the basics, which is like price action and level trading, um like key levels. Look into things like opens, which are like yeah weekly, daily opens. ah Look into systematic trading, which is like ah RSI, MFI, moving averages.
01:04:08
Speaker
I think MACD is meme, avoid that. Awesome oscillator is technically like volume and like momentum, which is useful. um ah Yeah, that's that's basically it.
01:04:23
Speaker
um
01:04:26
Speaker
Maybe for like further research, I would research market psychology, narratives, speculation, and cycles. um Yeah, I mean, like yeah the the Japanese stock, many of that bubble was interesting. Korea had its own in the past year, I think. um Yeah, even like the Roaring Twenties, the Tulips bubble,
01:04:52
Speaker
ah Yeah, like learning about bubbles is pretty good because you know how to capitalize on one. Even like.com. I mean like ah everyone's aware that the AI thing is probably in a bubble now.
01:05:06
Speaker
Yeah. Or definitely starting to be. um And there's this, yeah, obviously the other end of that trade coming probably next year. When I see a bubbled form, I rush in to add fuel to the fire. Haha.
01:05:23
Speaker
Yeah, it's the whole like, we are the top buyers, right? Yeah. Well, that's been a good talk. Thank you very much for coming on.
01:05:35
Speaker
Yeah, it was fun. It was fun. Let me know when the next one is. like yeah Yeah, people's ears off again.