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Insilico Terminal Podcast Episode 5 - VNTGPRN
49 Plays8 days ago
In this episode, V discusses developing as a trader through the 2021–22 bear market and how a macro framework shapes his approach. He breaks down positioning vs prediction, interest rate differentials, and carry trades, while exploring how macro conviction translates into intraday execution. The conversation covers narratives, data, Fed policy, crypto rotations, and possible next bear market scenarios — ending with insights on building edge, balancing discretion and quant, and leveraging the right tools.
00:00:00 Intro, V’s background, starting to trade during the 2021–22 bear market
00:05:09 Macro traders, positioning vs prediction, VAR shocks, applying macro to trading
00:23:54 2024 selloff, interest rate differentials, carry trades and correlations
00:33:11 Macro as conviction, holding trades, scalping liquidations, intraday execution
00:41:08 Market data, narratives vs positioning, outlook on Fed, Trump, tariffs and gold
00:51:26 Crypto rotations, lack of narratives, comparisons to 2021, seasonality and Q4 flows
00:58:21 Next bear market scenarios, stagflation fears, sideways chop vs crash
01:13:29 Closing thoughts on finding your edge, discretionary vs quant, importance of tools
Recommended
Transcript
Introduction and Guest Introduction
00:00:14
Speaker
Yeah, ah welcome to a new episode of the InSilico Terminal podcast. Today we have with us vintage porn, aka V. Yeah, you just call me V.
00:00:29
Speaker
know Why don't you tell us a bit about yourself and your background? You came very prepared today, but maybe we just start with that.
V's Trading Journey and Insights
00:00:37
Speaker
So my background is that I started trading basically around 2021, 2022, when I realized that just buying and holding might not give the return profile that I'm seeking.
00:00:54
Speaker
Mm-hmm.
00:00:57
Speaker
That was a really, really weird time to start trading too, because that was basically the end of the the crypto bull market. And we were headed into a brutal bear market where, you know, so many people blew up in 2022.
00:01:14
Speaker
And even in early 2023, I mean, you had like regional bank insolvencies and things like that. So... That influenced how I learned to trade because I was always conscious of the macro backdrop when thinking through trade ideas. And I know that's not very, i don't know, it's not a very popular thing.
00:01:39
Speaker
even on Fintwit, but to be perfectly honest with you, right, like a lot of the macro accounts on Fintwit and even CT are just like unnecessarily bearish all the time. Yeah. like Like the funniest thing that's going around. Do you do you know and Andy Constance, Damp Spring?
00:01:59
Speaker
ah no I don't think so. He's just getting absolutely cooked on the timeline. Find Fintwit account or whatever, but he's like, ugh.
00:02:10
Speaker
He's just been bearish. Like, yeah to be to be fair, he was right in April, but, like, he's just been bearish since April, and it's like the S&P is making new highs all the time and stuff, you know? so Many such cases. Yeah, and i don't know. It's just
Macro Trading Strategies
00:02:25
Speaker
kind of one of those funny situations where, yeah, like, macro guys get a bad name and for a good reason because, you know, a lot of them just, like, cannot make money.
00:02:35
Speaker
Like, they cannot they cannot shed their bias and make money. And it's like, I think there's like, it kind of falls into like two schools in some ways, right? Like, you know, you have like these old school macro guys and it's like, yeah, of course they're losing money. They don't realize that, you know, like we're just continually expanding global liquidity every year because of deficits and, uh,
00:03:01
Speaker
you've got just so much, so, so many underlying problems that there's like no way to get out of it other than, you know, deficits and debasement and, you know, just,
00:03:14
Speaker
issuing issuing debt on the short end of the curve like all all the stuff that you don't really see or never really saw in like stable first world advanced economies so yeah you know and it makes sense in some ways but in other ways it's just like you know you gotta like you gotta trade the market that you have right but i want to basically Talk about macro, but not trading macro, because you're not actually trading macro. You're trading the positioning around macro.
00:03:49
Speaker
And I think a lot of people get caught off sides with that. You know, like they try to boil it down to this simple like, oh, well, rate cuts mean it's good. And it's like, no, like there's a lot of context to it. Right.
00:04:02
Speaker
Yeah. um I don't know if people got caught offside last week with the ah the rate cut decision, but I actually wrote about it a little bit. And to be honest with you, I don't write for main posts. Like, in my main posts, I typically just reply with a lot of my ideas. But last week, yeah last week I was basically saying, like...
00:04:25
Speaker
You know, like positioning is probably stretched long here. um And I wouldn't want to long just because if predict positioning is stretched long, you have a good chance that that positioning is going to be tested after the rate cut decision because the rate cuts already priced in.
00:04:44
Speaker
right? As well as other things too, right? So you had quad witching on Friday, which is like a pretty serious liquidity event, you know? um And we're at the end of the quarter, so you're going to see rebalancing and that causes a lot of weird things and flows just around different assets and everything. so why do you Why do you think people view macro in the wrong way?
00:05:10
Speaker
Like, how how do how do they view it? Like, you you said you view it mostly in regards to positioning. Yeah. um Maybe you can explain a bit how other people view it in in your view and what what they get wrong about it. Well, the thing is, right, the people that trade macro aren't guys that are trading, you know, six, seven figures around. They're usually running huge, huge bucks, right?
00:05:32
Speaker
And that's not the kind of thing that you can just, like, make a decision because of one singular data point you kind of have to construct a thesis around it and scale in and out of positions over months right so i think a lot of it is a time frame mismatch where people get like the macro picture and then just assume that everything's going to a million dollars immediately right yeah when it's like well first of all nothing moves in a straight line but then also
00:06:04
Speaker
The problem is is, it takes years for some macro thesis ah thesis is to play out, right?
Trading Opportunities and Signals
00:06:11
Speaker
so Well, like, you can't just have a macro view and then execute on it right away.
00:06:19
Speaker
yeah kind of have to You kind of have to wait and to see in some regards. And to be honest with you, like, if you're trading taking trades just purely based on macro, you're going to lose money, right? Because it's you have all these different players in the market that are trading based on different things, and everything is path-dependent, right? Like, it doesn't really matter if you're right...
00:06:42
Speaker
you know, six months from now, if the path to getting that six months means you get liquidated along the way. so yeah so you know, it's it's very difficult in that sense.
00:06:54
Speaker
um I think there's maybe one or two really, really good macro trades a year that you can take that have outsized returns, like absolutely like astronomical returns if you get them right, because they tend to like,
00:07:09
Speaker
a lot of these macro inflection points tend to be, you know, these massive inflection points that just change the whole market structure and regime that you're in.
00:07:21
Speaker
So I would say a good example of this was in April, right? Like we had all the tariffs yeah the tariff talks and everything, you know, Bitcoin traded down like more than 25% at one point.
00:07:34
Speaker
And, you know, basically everyone thought we were we were headed for a bear market. Like it just like a, you know, full on like, yeah, we're nuking 70% from here. Like it's over.
00:07:47
Speaker
um To be honest with you, like there was a lot of uncertainty around that time. So it's like, yeah, you weren't going to just like, you weren't going to be comfortable but buying that bottom.
00:08:00
Speaker
but you would be more comfortable had you known certain things, right? So one of the first things in, um for, you know, macro and macro signals, um if you know anything about correlations and Varshok, like those are amazing events to to trade.
00:08:22
Speaker
And it's like, they don't happen very often, maybe like once or twice a year. Like we had one in April. um We had one around the carry trade unwind, which I want to talk about later because there was actually a lot of signal in that move.
00:08:38
Speaker
And ah bat that trade had been setting up for months, like literal months. and you Can you maybe explain a bit more what you Yeah, so a VAR shock is basically, VAR stands for like value at risk.
00:08:49
Speaker
And basically what happens in mount market downturns is you see... these shocks, these correlations where all assets correlate to one and everything sells off together, even though like there's no, there's almost no reason for it.
00:09:08
Speaker
Right. So like you expect to, you expect gold to do well in certain environments. Right. But like, if you see gold treasuries and stocks selling off at the exact same time,
00:09:20
Speaker
you know that that's a VAR shock, right? That's literally like yeah pods blowing up, everyone having to sell everything, just like sell, sell, sell, sell it all, all at once, right?
00:09:31
Speaker
So those are usually really, really good things to trade. In regards to Bitcoin, it's like, you know like if you can catch some of that volatility and ride it up like you you're probably going to make a lot of money on that trade regardless of your time frame a right like whether you're trading intraday whether you're trading you know over the next few days or weeks provided that you've sized the trade correctly for the volatility and you're you know you're not at risk of a shock taking you out where it just like, oh, dipped an extra 5% even though you know I caught all the signals, right?
00:10:08
Speaker
So when you see stuff like that, like that's those are incredible trades to put on and like they don't happen very often. so um In April, if you remember, right?
00:10:20
Speaker
It started, what, like February? This started February, right? But we didn't get the real shock yeah think until the first week of April. Right. So we had all that news stuff going on in February and March where it was like, you know, there would be a headline and all of a sudden we'd be up like five, five to 10 percent on the day. And then it would just immediately retrace. And that was good trading if you were a news trader, to be honest with you. But like the real signal came in April when you had.
00:10:50
Speaker
you know when you had all these correlations basically go to one and everything sold off immediately um you had a few days to buy the bottom there too at you know 70-ish k but it sets up for a good trade no matter how you want to play that because it's not only that you can absolutely just like buy the bottom and just hold it and wait right but it kind of defines your risk reward in a trade, right?
00:11:18
Speaker
So say that V reverses and you know we were at 73K and then all of a sudden you're trading at 83K, right? Like you have a clear risk reward to your trade there because you know if it trades below,
00:11:32
Speaker
that level or around that level, then there's something really, really wrong,
Market Dynamics and Conviction
00:11:36
Speaker
right? But otherwise, you know, you can pretty much expect things to get rebid, um provided again, of course, that like, you know, we're not headed for a Great Depression 2.0 or anything like that, which, you know, it's...
00:11:53
Speaker
I don't want to say it's impossible, but it's like, you know, it's it's unlikely in a lot of ways, right? Yeah. um You know, like the monetary authorities have... basically want to put a floor under everything and like for a good reason like you just constantly need all this stuff expanding or otherwise one group of people are going to get absolutely screwed right so but what what do you think about like the end of that if there is ever like i don't know i guess it's a it's a realistic scenario for that to to end in
00:12:26
Speaker
Oh yeah, there's gonna be a market bloodbath within our left lifetimes. It could even be in the next couple years, right? But there's just like, there's no way that you could predict that Like, I can't say, in six months we're going to be trading 80% lower, like with any degree of certainty. I mean, guess that's what a lot of macro people are doing that you criticized before, that like they're just doomers basically. Or if you get really into macro and you understand that eventually this has to happen, then you just become bearish permanently and miss out on a lot of the gains that you can have. Exactly. And that's why, like, you know, a lot of macro guys aren't taken very seriously.
00:13:08
Speaker
But then, like, It's also, i don't know, it's also like, it's very hard to apply... a lot of macro insights to actionable trade ideas, but like, you know, and that's why it's like, you kind of need to have experience in a lot of fields.
00:13:25
Speaker
And it's not so much that macro is like your main trading game plan. It's just added confluence. Right. So again, it's like, you can be bullish, but then go short because positioning is just like way too skewed to the upside. Right. Like if everyone holds your bullish view and it's like, you know,
00:13:45
Speaker
by all like but all reason, it is the correct view, that doesn't necessarily mean that you're going to go up, right? like You could go down just because like you know who's left to buy, right?
00:13:58
Speaker
yeah And that's that's kind of what you need to focus on more than the macro itself, right? Because like the macro is great, you know, like you're you're holding spot bags, you know, you've had them for like a year, two years, you know, it's like, if you look at the Bitcoin chart over the last like two, three years, it's beautiful, you know, it's just like perfect stair step.
00:14:19
Speaker
If you're trying to trade this though, it's, garbage. Like, it's absolutely garbage. Like, I don't know, like, compared to the parabolic blow-offs you got in, like, you know, 2017 and 2021, where it was just, like, you could have held a long for three months and, and like,
00:14:37
Speaker
it would have been fine because you were just basically going up, right? Like this is trading like garbage in that regard, because it seems like, you know, you don't get really clear trends and then all of a sudden it reprices like 10%, 15% higher, and then it chops again. and it's very, very difficult to trade that stuff with futures.
00:14:58
Speaker
um But if you were holding spot for the last, you know, I wouldn't say 25. 25's been like okay. I mean we're up 35% ish. Right? But like if you've been holding spot from 23 like you're laughing right here. Right?
00:15:12
Speaker
So again it's it's really really one of these things where it's like you can't really trade macro on like a one month thing unless you're actually thinking about positioning as well and like Even, you know, like a lot of a lot of stuff that order flow guys um use is really, really great too in conjunction with macro because like if you could see that open interest is ramping up and like you're going into an event that's already priced into the market, you better believe like that's a fairly easy short or at least, you know, a good signal that you should probably close your longs, right?
00:15:58
Speaker
So, so Last week, you know, um with the FOMC's decision to cut rates, the the FFR by 25 bps, that is one of those, that was one of those times where it was like, yeah, like this is, like if you had longed, you know, if you had been long from 107 to 1010 and you held that into the rate decision, like that was the trade, right? That was like an easy 10%.
00:16:26
Speaker
So it's not really, you know, it's not really that, hard to take profit there. But you know you had people going long into the event and it's like the rate cut like the rate cut has been priced in forever. So yeah the thing is, right?
00:16:44
Speaker
especially when trading rates like that, it's not always about the front month, right? So now what you'd have to be looking at is if you look at, you know, like the FedWatch tool on the CME website, for instance, right?
00:17:05
Speaker
you can see You can see how the curve is pricing the probabilities of the target rate at various meetings, right? You know, like this year, like it's not guaranteed that we're going to get three cuts, but, you know, there's a high likelihood that we get at least one cut, one more cut this year. Yeah. Right.
00:17:23
Speaker
So I wouldn't say the market is really worried about that or repricing around that unless something crazy happens. And, you know, like they decide like no more rate cuts and it's just a one and done situation.
00:17:35
Speaker
Yeah. you're not gonna really see much
Strategies through Economic Cycles
00:17:39
Speaker
repricing around that. So you'd have to look to next March and April really as the part of the curve that you want to be like not trading directly, but looking at to see what's happening um with regards to the FFR and Bitcoin.
00:17:57
Speaker
um
00:18:00
Speaker
I think there's some signal there, but it's not necessarily the best signal. just on its own. It's like you're using that with other signals, right? So, I mean, the f and the FFR is only one rate, really. So it really, like... but what what do see What is the FFR? The federal fund rate. So basically the the target rate that ah the Federal Reserve uses, you know, ah uses to price their rates. So I would say...
00:18:32
Speaker
Yeah, it is important, obviously, because ah everything is the cost of capital. But like when you're looking at the economy, though, as a whole, you kind of want to look at the five and ten year, because most corporates, that's what they're issuing at, right?
00:18:48
Speaker
So corporate debt is actually just as important as the federal funds rate, because if corporates can issue debt cheaply, right, like... then the economy is going to be doing well because these guys are borrowing money for, you know, CapEx and OpEx at cheap rates, right?
00:19:04
Speaker
So that's like one of the risks that you could see is if like long or longer end rates blow out, then it's like, well, yeah, like that's going to be terrible for the economy, right?
00:19:16
Speaker
Because mortgage rates go up, you know, corporates can't refinance at cheap rates. um That usually results in layoffs. And, you know, that's like the whole cycle. Right? That's like the whole economic cycle. What exactly does blowing out here mean in this context? Like the longer end? So blowing out is when yields spike, right?
00:19:36
Speaker
So right now, you know, like the US 10 year is trading at like 4.1% ish, right? I don't even have the chart up. I'm just kind of, yeah, 4.137. So blowing out is when...
00:19:47
Speaker
so blowing out is when rates spike up suddenly. This causes a lot of lot of dysfunction in financial markets because the issue is, right, everything has to reprice around the cost of money.
00:20:05
Speaker
That's probably the most important thing, like, as far as macro. And, like, for trading, yeah, maybe maybe short-term there's some signal, and, like, long, long, long-term there's some signal.
00:20:16
Speaker
But, like, in the medium term, it's a lot of it can be noise. But you have to think, right? Like... so much of the economy is just borrowing, right? In fact, like, monetary expansion and credit expansion is just borrowing.
00:20:32
Speaker
So people are more incentivized to borrow when yields are down. So, yeah you know, like... That makes sense, so yeah. So you had negative interest rates in Europe.
00:20:43
Speaker
You had negative interest rates in the U.S. for a a small period of time. You've had negative interest rates, effectively, in Japan for, you know... like a decade plus.
00:20:55
Speaker
So yeah it's not only that that that's going to cause distortions in the economy, right? Like, I mean, you've seen that with just just look around, you've seen how distorted the economy has become. like There's almost no reward for work, traditional jobs, you know?
00:21:11
Speaker
And like everyone's like just trying to hyper gamble their way to a decent living. like I don't even want to say rich. I just want to say, like yeah like oh, you want to buy a house? Yeah, you're going to have to hyper gamble just to have a middle class lifestyle.
00:21:27
Speaker
and it's like It seems like if if you don't have assets here, very it's very hard to do well in the current paradigm. Exactly. Because it's so de decoupled from the real economy. Exactly. And that's like that's definitely the result of like negative interest rate policy in a lot of places. And, you know, like, growth.
00:21:46
Speaker
You could already, like, i mean, I've seen some crazy arguments that I kind of believe that, like, growth never really recovered after 2008. And, like, Yeah, I've seen that too. To be honest with you, like yeah like if you wanted to if you wanted to get back on track
Currency and Economic Events
00:22:02
Speaker
to where the economy was headed before 2008, yeah, we're a long ways off because you know even if 2% or 3% real GDP is the target, right if you fall off of that for a couple years and then get back to 2% to 3%, you've missed compounding.
00:22:19
Speaker
Right? Yeah. And to be honest with you, as far as like the real economy is concerned, it's like, the disconnect between the real economy and financial markets has never been wider.
00:22:34
Speaker
So, you know, it's that whole bad news is good news thing, right? Where like, oh, economic weakness means rate cuts, which means our assets are going to go up. And it's like, yeah I mean, like, that's not always the case.
00:22:48
Speaker
You know, there's still context there, but it's, you know, whenever the economy is in that state, you can tell that there's something... definitely wrong with the long-term health of the economic model that you're living under.
00:23:01
Speaker
But i you know I try not to think about too much of that stuff when I'm just trading, right? Because like, ah the Yeah, it doesn't really like make that much sense. It doesn't. But like if you were you know if you were planning like your portfolio, like yeah, you absolutely have to take that into account.
00:23:18
Speaker
you so I think it's it's good it's good to have like the long-term view, obviously. I think that's why that's why crypto is around. That's why Bitcoin is being bought. That's why gold is ah being bought. I think it's very ah just good to think about. like All the fiat currencies are going to zero eventually. Yeah, yeah well, and that's the thing, though, right? like there They're all going to zero, but it's like It's not a zero, like a literal zero, like you can't buy anything with them. It's just zero yeah in terms of like, well, what you could have bought if you would just help this instead, right?
00:23:50
Speaker
So I don't know. It's it's such a weird I mean... i mean I think. So how how like how exactly do do you like apply this in your personal training, either in the in the short term or in the the longer term? Since you said like meet medium, it's not that useful. but So that's something I want to talk about, and I'm going to use 2024 as the reference point.
00:24:14
Speaker
So if you remember 2024 in August, we had a massive sell-off, like an absolute massive sell-off. It was like 30% on Bitcoin, right? Like some things just absolutely died.
00:24:29
Speaker
And that was basically, you know, the unwind of the yen carry trade, right? So this is like a, this is like an a pretty important thing to look at because this is, again, one of those one of those things where once a year, like if you nail this move, like you ate really, really well.
00:24:48
Speaker
So, and you know what, that's what I think macro is strong for is catching those inflection points. So the way I use macro to trade is There's a few things. one of One of them is interest rate differentials, right?
00:25:04
Speaker
Now, but that's more important for Forex. So, like, if you know interest rate differentials really, really well, you could probably make a ton of money trading Forex. But what that is is basically um policy rates between different central banks. So, for instance, like the U.S. had their interest rates at, you know, their target rate at, like, 4.25 forever, right? Mm-hmm.
00:25:27
Speaker
forever right um
00:25:31
Speaker
And other central banks had to cut because their economies were tanking. And as a result, you saw you know you saw stuff like the DXY pumping.
00:25:41
Speaker
You saw stuff like you know the euro nearly trading parity with the dollar. um all All that kind of stuff. And it's... Kind of important to pay attention to interest rate differentials, especially ah with the context of the end carry trade.
00:25:59
Speaker
um That was, again, one of those things where that had been setting up for months because, you know, people were talking about the BOJ hiking their interest rates and the U S was going to start cutting their interest rates. So that's like, that's one of those divergences in monetary policy where you're going to see things reprice around that.
00:26:23
Speaker
And it's your job to find out what's going to pay you the most to be involved in that trade. Right. So like, obviously one of the ones was, you know, like the one people would think of first is uh obviously short usd long jpy right which is like yeah that's a valid expression of that trade because you know capital will move out of us dollars which are now yielding less than japanese yen So you know you're going to see some flows there, and you could probably catch that trade for a decent move, which is right.
00:26:58
Speaker
um In Bitcoin, what was happening was hedge funds were borrowing JPY at near zero. and putting on the Bitcoin carry trade as well to capture that premium.
00:27:12
Speaker
So and is one of those that is one of those things where it's like, you know, if you'd been aware of that, you actually had like four or five days to get into either just, you know,
00:27:25
Speaker
selling your Bitcoin exposure or getting short Bitcoin or you know anything anything to express the view that Bitcoin is going going to sell off as a result of this carry trade unwind.
00:27:37
Speaker
um
Conviction in Macro Trading
00:27:39
Speaker
what what What exactly does the carry trade here mean in regards to Bitcoin? It was actually kind of two carry trades. and one in in certain ways. So the Bitcoin carry trade is obviously just like, you know, you short the CME future and you hold spot, right?
00:27:54
Speaker
And then you just capture the difference between between the two, right? So you're obviously adjusting your short exposure to keep that in line. And that's like, you know, that has been pretty profitable.
00:28:08
Speaker
It still is kind of profitable in a lot of ways, but like you're capturing you're capturing yield that's, you know, better than and would say it's probably better than you know high yield junk bonds um so you know it was a reasonable trade to put on especially if you were borrowing money to put on that trade at near zero rates right because you know your your carry cost for the trade is fairly low you know um And obviously, there's you know you could do that with funding rates as well, with perps if you wanted to.
00:28:43
Speaker
But I think most people were actually doing it all on the CME futures, which is fair enough, right? ah But there's also the yen carry trade, which is you borrow yen at near zero rates.
00:28:59
Speaker
I think it was like 0.1%.
00:29:02
Speaker
um And then you either long US dollars where or US treasury specifically where you're getting paid that yield, right? At one point it was like 4.5%, right?
00:29:13
Speaker
you could borrow at right so you could borrow at zero and get paid 4.5%. So it was like, you know, putting on that trade was like reasonable in a lot of ways, because it's again, like, you're you know, you're just like, you're just capturing premium, right?
00:29:31
Speaker
um From again, the interest rate differentials. So when that started to unwind, because, you know, Japanese yields were going up, U.S. yields, U.S. dollar yields were going down.
00:29:44
Speaker
ah You could, you know, you could, infer that if some of that money was going into Bitcoin to put on a carry trade, then you would see spot selling pressure, right?
00:30:01
Speaker
And to be honest with you, it wasn't even just carry trades. People were borrowing yen to go along the NASDAQ and stuff, right? So it wouldn't be surprise. so But again, right? This was like this was correlations purely, right?
00:30:13
Speaker
Like when Bitcoin sold off, like everything sold off. I i remember making a meme about it because like, literally every financial asset sold off. And I think even yet Yen didn't sell off, but like it didn't do much. So um yeah. So there was a lot of there was a lot of weird things happening there. So the first one though is that The interest rate decision kmar ah came... So, no, no, no.
00:30:44
Speaker
USDJPY started selling off and in anticipation of the rate hikes, right? That was your signal that, oh, okay, so this is probably the carry trade unwinding because of the interest rate differentials, right?
00:30:57
Speaker
So, I wouldn't have expressed the trade there, but it took Bitcoin two and a half weeks to start selling off. So... you know you had You had basically two and a half weeks to plan out your trade um with the yen carry trade unwind.
00:31:14
Speaker
And then the sell-off was actually worse in yen terms. So it sold off an extra 5%. Like the Bitcoin Japanese yen, yeah, sell-off was even deeper, right?
00:31:30
Speaker
So in a lot of ways, there was a lot, there was... there's many many ways you could put on that trade and again like every asset sold off as a result of that so that was one of those that was one of those macro events where like once a year you know like you can put on this trade and make make decent money as long as you know what you're looking at um it's you know it's difficult if you don't know where to begin but
00:32:02
Speaker
the most important thing to realize is that you know money and the price of money is the backbone of absolutely everything in the economy, right? It's a debt-based monetary system.
00:32:14
Speaker
So that's like your kind of your starting point is like, Okay, so it's a debt-based monetary system and everything is priced in money. So obviously the price of money is going to influence things.
00:32:27
Speaker
And if you go from there, you'll find things that you can look into that are could provide significant edge. um in a lot of ways, but you know, that's like really, really kind of long-term because you know, you had four months to, to plan out that trade and two and a half weeks to execute the trade. Right.
00:32:47
Speaker
So, you know, you're not exactly, um you're not exactly going to be trading that these, these kinds of things often. So how much you invest your time into learning that stuff is,
00:33:02
Speaker
you know It's only worth it if you plan to take these trades you know once a year, twice a year. kind of thing um do you think Do you think it is actually needed for the execution of the trade?
00:33:13
Speaker
No. like For example, if if someone someone just saw that Bitcoin is down 15% on a day or whatever and then they just bought just off of that? No, not necessarily at all.
00:33:24
Speaker
But I will say that it will add conviction to positions. so
00:33:31
Speaker
I think a lot of traders have problems with like determining what trades to hold and what trades what trades to get rid of in profit. right How long you hold onto a trade could definitely be influenced by your knowledge of macro.
00:33:48
Speaker
You know, because there's some trays where it's like, oh, if I had just held that for like an extra, you know, whatever, six weeks, I would have made so much more money. Right. Yeah.
00:33:59
Speaker
And that's the thing. um Without that macro kind of context, you wouldn't know. You know what I mean? Because like... I mean, yeah, like you can use a lot of metrics to determine whether or not like you should exit or enter a trade, but none of them are going to tell you of whether or not in six months it's going to be higher.
00:34:22
Speaker
You know what I mean? Like nothing can really give you that confidence. um a good macro thesis. and i guess you know ah i guess without without the knowledge, you can still do do the short-term trade. But ah as I remember correctly, that was also like the macro bottom, if you could call it that, or like the the local.
00:34:41
Speaker
it It was like the lowest Bitcoin has traded since then. um Exactly. And I guess that that kind of validates what what you were saying. Exactly. And that was one of those things too, where it's like, you know, it was it was a VAR shock, right? Like everything sold off at once.
00:34:57
Speaker
So yeah, you could play that short term and probably make money. But if you had a bullish view on Bitcoin there, you could have held that you could have held that trade. You could have loaded up on spot at those prices, you know, and you'd be up quite a significant amount of money.
00:35:13
Speaker
So... Again, it's like, it's one of those things where it's like, if you have the macro context and you have like ah bullish view, then you might as well, like, like,
00:35:28
Speaker
It's one of those situations where it's like, well, that's like, that's such a good trade to put on and your macro macro thesis will confirm that, right? So I like, you know, I'm in two minds, right? Like, I think like the best edges are like on really low timeframes and like really, really high timeframes and like anything in between, it's like, well, you know, like, can you actually quantify that that's an edge, right?
00:35:56
Speaker
Because there's so many factors that go into it. So like scalping liquidations on like a one or five minute chart, for instance, is like that's like one of those edges that just like and just doesn't go away. you know um it's you know They're really easy operationally to put on to put on those trades. And it's like, as long as you know what you're looking for, like you can just put it on and like you can find one one or two per day across all the assets that trade in crypto where, you know, traders are over leveraged and like extract money out of the market like that fairly consistently.
00:36:32
Speaker
Um, And like you don't need any quantitative tools to do that. You can just like you can just know, right? like you like like The terminal's the best for that because it's like, you can set up your terminal just for scalping liquidations, right? You just have a one-minute chart, a DOM, and then the tape on the bottom with all the liquidations. And it's like, oh, okay, there's a ton of liquidations.
00:36:54
Speaker
I can make some quick money off of that, right? You can find that like four or five times a day um across all the assets, right? Yeah. And the the funniest thing too about those those trades is like, and they kind of give you really, really good screen time.
00:37:10
Speaker
And that's like, a honestly, that's such a good edge, such a such a good repeatable edge to have where it's like, you don't even really need to know what you're doing and you can put on these trades and make money consistently. that's good. And like,
00:37:28
Speaker
um On the high, high, high timeframes, right? Like, regardless of whether or not you have a macro view, if you're involved in crypto, like, you have a macro view. Your view is that, like, these coins are going to be worth more in the future because people are losing trust in, you know, government-issued fiat currencies, right? And your macro view is informed by the fact that, like, hey, you know, like, the banking system itself is full of friction and fees and...
00:37:57
Speaker
you know It basically complicates this whole problem of value exchange for private individuals. So why not? right like why not Why wouldn't this go up? like More people are going to realize like how much easier it is to just use crypto for a lot of things. right So that's...
00:38:17
Speaker
that's like that's what I think. And I think like a lot of people have made money just off of very, very simple macro views like that. Um, obviously getting more complicated is if you want to take more trades and macro, um, I don't recommend it.
00:38:34
Speaker
I think like the best thing you can do is maybe take one or two trades a year where it's obvious, you know, that like, it's really, really obvious what's happening and you can just trade it.
00:38:46
Speaker
Um, I think that like it's useful in events too. Last week, like I flattened out on the day of FOMC. Even though we traded a little bit higher, it didn't matter. knew positioning was stretched, right? Everyone wants to long going into a rate cut decision.
00:39:05
Speaker
Um, I think like, I think they're right. Like, I think we do trade higher eventually as the price of money comes down, but I don't like, I don't think it's going to be right away, you know, like markets just test positioning. Right.
00:39:20
Speaker
So, you know, I mean, sell off is going to be as a result of that position and in getting stretched and like late longs getting punished and, um, It's not really, i mean, yeah, Bitcoin's like a massive market and, you know, macro becomes more and more important to it every day that it trades above. what What's the market cap of Bitcoin now? Like 2 trillion?
00:39:43
Speaker
Like, you know. i guess. I don't know. actually But I think ah the the last last FMC is actually a good example because like the as you said, the rate cut is pretty much priced in and then maybe if we get a surprise, like the upside or downside, like if you get a 50 basis point cut or ah ah not a cut at all, then positioning becomes different.
00:40:06
Speaker
But also like regarding the the future guidance and the what he's saying in the press conference after. And if all of that is like pretty much within expectations or like a nothing burger, then a sell-off is very like warranted because people have been so long, but they didn't like get more than... like All the long ah the reasons for being long have already been priced in, so there's no reason to like keep buying exactly at that moment. Exactly. And that's the thing, right? like when things are priced in, like, you don't really want to be trading that. You know what I mean? Like, well, why would you trade something that's already priced in, right?
00:40:42
Speaker
Like, there's no there's no edge of that. So, yeah, like, around some of these events, if you know what events that you're looking for, and you have a decent read on positioning, like,
00:40:55
Speaker
there's good trades to take um so now right what everyone's looking at is uh the labor market and cuts in the future as in 2026 right so like march april whatever right so like those are going to be the main macro data points that people are going to be trading and hedging around and everything like that right so what what do What do you think about that regarding all the revisions and stuff like that? Because many people are saying that the number is just basically made up anyway. Yeah, it is. it It absolutely is, because it is made up anyway. yeah
00:41:31
Speaker
But it the context is is what's important too, right? So, yeah, that number was made up, right? but And all these jobs were revised. But the other thing is too, though, like...
00:41:46
Speaker
It's not just official jobs that contribute to an economy as well. So, I mean, you know, America had an illegal immigration problem. problem How many of those guys were working jobs that were just not really documented or included in the statistics yeah too, right?
00:42:03
Speaker
So, I mean, you you're never going to get an accurate reading. And like you could, you could absolutely get an accurate reading for the jobs number, but you know, no one wants to actually do it.
00:42:15
Speaker
Right. um but Maybe if we put it on the blockchain, then more accurate. I mean, yeah. Like, yeah, but like, even it just like, i mean, think about it, right? Like you have payroll companies that manage payrolls for all these massive companies.
00:42:33
Speaker
You could build a better unemployment model with that data. And, you know, we're still relying on surveys. So, I don't know. like um As far as the revisions go... I guess at the end of the day, it's it's mostly about the narrative. exactly Just single but how how you interpret it.
00:42:49
Speaker
how How it is interpreted by the FAT or whoever is like making decisions. Exactly. know what? I think it's
00:42:57
Speaker
i think it's there's like three levels to this, right? Like if you're trading it, like you could be like a degenerate news trader that literally trades the RNG of the number drop, right? like Like for instance, today we have unemployment claims, right?
00:43:14
Speaker
Like you could literally just trade that because like you think, well, we're, you know, the unemployment claims are going to come in soft or hard or whatever. You could literally just trade that number if you wanted to, right?
00:43:25
Speaker
Or if you were paying attention and like watching the market and price, knowing this date was coming up, right? And viewing positioning, you could take a position afterwards when you know that, oh, that number was already priced in. And, you know, people are longing this because they think it's good news. Well, I'm just going to wait and short it back down, right?
00:43:45
Speaker
Which was like, you know There's a lot of trades that you can take like that. where it's like and You'll see this too on news releases where it's like, oh, it's a good news release and we pumped for 20 minutes after the news release. right there's a there's yeah you know if If you know what to look for, like that's an easy short sometimes where it's like, yeah, you short it back down and you're out within like half an hour to an hour. again, the number meaningless.
00:44:11
Speaker
again like yeah like the number is meaningless um As far as the real economy and like, let's be honest, it's noisy too, right? Like, one's planning an economy after like, you know, a single print on one data point that only ah influences one part of the economy, right?
00:44:34
Speaker
Like no one's doing that. So, you know, it's all about the broader, it's all about the broader trend in a lot of ways. And it's all about looking forward six months.
00:44:47
Speaker
you know So if like the trend is, oh, unemployment claims are going up, right? Well, yeah, that's great, but that's still not even enough, right? like Unemployment is like the last part of the economic cycle in a lot of ways, right? Because it's like you get credit expansion, you know you get businesses is borrowing, CapEx, OpEx, and then...
00:45:11
Speaker
you know That leads to people getting hired. The economy is running well. um you know The economy is expanding. So as a result, you know interest rates are like, well, i mean you know the cost of capital is too loose relative to how much money is circulating in the system. We've got
Macro Outlook and Trends
00:45:29
Speaker
to raise interest rates. So interest rates rise. you know CapEx, OpEx comes down.
00:45:34
Speaker
People stop spending. you know And then you get layoffs, right? So if you know that, if you know that, then it's like, oh, okay, well, now I have a better idea of what this number means and why ah need to be paying attention to this number in the broader trend.
00:45:52
Speaker
So it's really... i guess i guess um the most interesting question then is like, what what is your outlook on the next like six to 12 months um on macro-wise?
00:46:03
Speaker
Because I think ah what what we have right now is pretty much pricing, but it's also not just the... the It's like multi-layered because it's not just the the interest rate decisions and like stuff like that, but also because Powell is going to end his term early next year, I think.
00:46:20
Speaker
And then we're going to get a new fat chair and also other. and i don't really know how it works, but like I guess we we Trump is like trying to get everyone on his side on the board. Yeah.
00:46:31
Speaker
And then we also have like a huge influence because it's like supposed to be to be neutral, but it might change. And the what is your view on that? Well, I mean, Trump's a wild card, first of all, right?
00:46:42
Speaker
like you it's It's hard to plan even like three months in advance when he's in office because like things could just change. you know like We saw that with tariffs where it's like yeah things could just change. Now, my like ultimately, my view is that like yeah tariffs are bad, but like they're not going to be as big a lever on the economy as some people think they're going going to be.
00:47:05
Speaker
um I don't know. It's just, you know, things are excluded where it's like, oh, okay, well, I mean, if these things are excluded, then what's the point in even having the tariffs in the first place, right?
00:47:17
Speaker
And then like, I i mean, if if you look at the charts, I guess the market is agreeing. Yeah. And I also, I also think like,
00:47:26
Speaker
I mean, I don't think they have as much leverage as I think, right? Cause like, you know, like, I, you know I still think America is one of the, or probably the as far as economic health, the healthiest country in the world, despite all the Doomer stuff you see on Twitter all the time and like the everything else.
00:47:49
Speaker
But I still don't think they have as much leverage as they'd like. I mean, you know i mean so many critical components of like the US military, US healthcare, care all of that stuff is manufactured overseas so in countries where you know they want to apply tariffs. So it's like,
00:48:07
Speaker
I don't know. i don't know ah if they stick or not or how impactful they'll be or if there'll be exclusions or, you know, there's like a lot of wiggle room there. i don't think it's like that, that important. That's not really what I'm paying attention to overall. I mean,
00:48:21
Speaker
things are setting up that it should trade higher, right? I've got, like, i think gold will definitely trade higher in this and this regime with lowering rates, you know, and general debasement. And, like, if, you know, if Trump wants to give the Fed less independence, right, that's going to be, that's just in order to facilitate debasement, right?
00:48:45
Speaker
um He wants interest rates lower. you know He wants the cost of capital to come down. He wants people out there buying things, investing in things. so That's a very like it's not like outlandish to think that we would trade higher in gold and equities.
00:49:02
Speaker
um Right now, you know I'm a little bit concerned about Bitcoin's relative underperformance. to gold and the S&P and things like that. Why do you think that is? I think that is really the most interesting question right now. The gold chart is basically looking like what you're saying is true and going to double or whatever, but Bitcoin and crypto is kind of limping around. I couldn't honestly say for sure what's going on, right?
00:49:29
Speaker
you know If I could, i'd be you know I'd be trading it and making tons of money. But there's a few things, right? so The first thing is that, you know, they like there's simply not that many narratives.
00:49:42
Speaker
going on in crypto, right? Before you had all these stats, you had Michael Saylor, know, plying money into the market. Now you had Tom Leach like using, frigate, what was it? Was he using Ichimoku Cloud to replace that?
00:49:56
Speaker
It's like, you that's kind of, that's- And that trend lines as well, I think. Yeah, like that's, that's fraud, but that's also a narrative in the sense that like, well, we have this idiot billionaire just like, you know, buying billion dollars worth of this stuff.
00:50:10
Speaker
worth of this stuff on the open market, right? So, you know, like and you're gonna go up, right? So like, I think part of it is lack of narrative. ah Another part is rotations.
00:50:22
Speaker
So like, you know, I mean, crypto guys are used to seeing rotations, right? Like we have shitcoin rotations all the time. We have rotations, you know, like Aster is a perfect example where you saw hype down Aster up because there was a rotation there.
00:50:37
Speaker
um Like we used to have the old Bitcoin rallies and then alts rally as people rotate from Bitcoin to alts. Right. And that was the thing. And like there was definitely trades there that you could take. And like you could definitely build a long term thesis around that before.
00:50:54
Speaker
But I think as far as Bitcoin is concerned and like the crypto market as a whole, like, yeah, that's become a rotation in TradFi as well. Right. So what I'm looking at is small caps. like if small caps, like specifically the small cap index, right? Like does really well. Like that's a pretty good sign that cryptos were going to rally not long after. Right.
00:51:17
Speaker
And it's the same thing with gold and equities, right? Like gold usually rallies first and then Bitcoin rallies, um, equities, same thing. So it's all the risk curve, right? Like you're constantly rotating out the risk curve as things get crazier and crazier. Now, I mean, I'm,
00:51:38
Speaker
I'm in the camp that like things will get really stupid and that's when you're supposed to sell, not buy. you know what I mean? like I could be wrong on this. yeah I'll still make money if I am wrong because i you know I'll take profit on long-term positions, right?
00:51:53
Speaker
And like I will trade on lower timeframes to try to access to get excess returns out of the market. But as far as that goes, like yeah, like we could get into a really, really stupid time in the market where like stuff is just rallying for no reason with no underlying fundamentals. And and like the thing doesn't actually do anything, right?
00:52:14
Speaker
um um I was just thinking it's kind of insane when you when you look back at 2021, which everyone always does over golden days and alt season, and everyone is like praying for that again, with ah how everything else is doing, like stocks and gold and and all of that other stuff.
00:52:33
Speaker
It kind of almost feels like people don't really care about crypto anymore. ah Like outside out outside of the crypto bubble. Even with like stuff like ETH doubling, almost sitting all time high again. Gas prices are still low. No one is using anything on chain. It's like prices are going up. But I feel like normies or like the mania of back then is really just not not really here at all yeah anymore. It could be.
00:52:56
Speaker
um'm I'm wondering if that if that is going to to happen again. It could be for sure. I mean, it's, you know, there's no way to say with any degree of certainty whether your asset class will outperform or underperform. And that's why you can still get returns out of markets, right?
00:53:12
Speaker
Because if everyone knew, then, you know, there wouldn't be any returns to to get. But I think overall, it's like, that's like yeah you got that the lack of narrative um you know waiting for a rotation ah the thing is too right like yeah we just got the cut you know we just got that rate cut like it takes a while for liquidity to move through the system, right?
00:53:38
Speaker
It's not like, and I'm not even saying that the rate cut is the be all end all. Like a lot of rate cuts are just psychological in some ways, right? um Especially the FFR. The FFR is a very psychological rate cut because like, do you borrow at the federal federal funds rate?
00:53:56
Speaker
You know what I mean? Like no one like no one really borrows at that rate, right? yeah So, I mean, you could argue that, yeah, like institutions that control a lot more of, you know, capital flows do get to borrow at that rate, but it's still like, you know, the most important thing is how everything reprices around that, not necessarily the cut itself. Right.
00:54:18
Speaker
um So yeah, it it takes time. it honestly takes time for, for liquidity to move through the system. um I think, one of the things that's getting to people is that, yeah, we've had the stair stepping in the cycle where it's not like we just get a parabolic run and everything just goes up forever. I mean, like we kind of got that in 2024 with all the ETF announcements and everything. And like, I think that front loaded a lot of buying um just because again, right? Like you have an ETF, institutions are trying to, trying to,
00:54:52
Speaker
be cool with crypto and stuff and like you've suddenly provided access to crypto for a lot of people that couldn't buy it before even in like regulated accounts like you know tax-free savings accounts and things like that right so in a lot of ways it's it's one of those things where it's like well what's the next narrative and Yeah, I think that's important. I think the liquidity picture is important and that takes time.
00:55:21
Speaker
Obviously, think a rotation is important, right? Like, you know, we just got like, first of all, like the Russell hasn't made a new all time high yet. I don't think, oh, at least the futures have, you check the index full 3000, like the Russell 2000. Okay. yeah, like,
00:55:39
Speaker
okay so yeah like The futures haven't haven't made a new all-time high yet.
00:55:47
Speaker
I think it's going to be one of those things where it's like, yes, it's going to take a little bit of time. you know like Everyone wants everything to happen like right now, right away, and it takes time.
00:55:59
Speaker
And we're heading into Q4 too, right? like I mean, and there's that whole meme of summer being boring. and like no one allocating in summer. And like, yeah, that's true.
00:56:10
Speaker
But it's also like, that also extends into September in a lot of ways, right? Because you know you got the end of the quarter, um you know as September's you have options exp expiry, you have an FOMC meeting.
00:56:24
Speaker
So it's like, well, why would people allocate before all of those, right? like And the traditional bearish seasonality as well. Yeah, actually, as far as September seasonality, I'm pretty sure that's like a mixed bag where it's like, yeah, you get some sell-offs, but it's usually like, I think it's that the impact of the September sell-offs are so great that it's lodged this, oh, September is a bearish month in their minds.
00:56:54
Speaker
But yeah, I mean, there there is some, like, I wouldn't say a lot of truth, but there's some truth to that, where it's like, yeah, you get a sell-off. And like, to be honest with you, I think a lot of that is actually just like quarter-end rebalancing and setting up for Q4 most of the time, yeah as opposed to like an actual, like, yeah. So, I mean, I guess. I guess the seasonality thing could could be in play.
00:57:17
Speaker
But again, like, would you, like, you know, you're managing billions of dollars. Is the first thing you do when you get back to the office, like, just start going long things? It's like, no, like, you might as well wait till Q4, right? You might as well rebalance in Q3, right? So there's still, like, a lot of lot of flows things that you could look look towards. Yeah.
00:57:40
Speaker
Yeah, I think we trade higher. But the thing is, if we get into that weird phase of like the business and credit and liquidity cycle where like stuff is just popping off, like that's where you're going to sell.
00:57:54
Speaker
Like, i mean, yeah, like you could hold on for another 2X, but why would you? Just sell, you know what mean? Sell when it gets
Crypto Market Predictions
00:58:01
Speaker
into that mania phase. Like, yeah, you can wait it out and extract some more premium, but start selling because like, you know, when you get into those phases, you get an opposite reaction as well, right?
00:58:13
Speaker
So think bear markets, think like, you know, parabolic blow off tops, what happens, right? um And, you know, I have nothing to back up this next statement.
00:58:27
Speaker
I'm just kind of saying it, but like, I've kind of thought about it and like, i'm I'm interested. I think, I think the next bear market, like the next crypto bear market, isn't going to be like a flush that happens in a year.
00:58:40
Speaker
right but i think it's going to be like a long sideways painful choppy awful period right i don't know how long it's going to be i don't know how long it lasts but like i don't think we're going to get like a traditional bear market where we just like go 80 we all we all just wait a year by the bottom and then get another 10x right i think it like the next one would absolutely test everyone's patience and like just sideways and down and like really awful sluggish price performance um it's like bitcoin is such a huge market cap it takes so much to move the price you know and like yeah you have a lot of og selling now but like there's people that are up so much that they would just not sell
00:59:32
Speaker
right like i mean like I've thought about it too, where it's like, oh okay, well, I have some Bitcoin and I'm up so much on it. like why would I sell it? You know, like I don't need the money.
00:59:44
Speaker
i think this thing trades higher in like 10 to 15 years, you know? um So I don't know. It's like, it's a weird one. I mean, I could be wrong again. And like we knew 80% and I would actually be, would actually be happy if that happened because you know, we get another chance. Past bear markets have also kind of been the same though. Like with this, uh, long times of just low volatility, nothing really happening, kind of the hopelessness. Exactly.
01:00:10
Speaker
Or are you just saying that that that could be like, because I think maybe when when was it like that in the past? I guess 2019 or then 2022 or like parts of 2023. Well, I'm thinking it's going to be. Do you think it's going to be like five years? I'm thinking it's going to more like.
01:00:28
Speaker
the 70s in equities where it's like you have high inflation you know what I mean the economy isn't growing and is really sluggish yeah that's really scary like you know like everything just sucks because like no one has jobs or or no one has jobs that pay enough but then like everything is super expensive you know what I mean so I don't know it's like that's kind of my view because
01:01:00
Speaker
if we did get stagflation like some kind of stagflationary environment like i don't think crypto does well but i also don't don't think it does badly either right you know gold could do well but you don't know you also don't know for sure if it'll do well it'll probably hold up well but it might not necessarily outperform right and then it's just
01:01:28
Speaker
it's just I just don't see way out of it that doesn't result in your purchasing power going down. You know? think it's like... So, if we did have a bear market... Yeah, if we did had like ah have a bear market as a result of a recession, it's like, yeah, we're going to nuke, but like...
01:01:50
Speaker
think it's going to be like a while before everything actually recovers. I'm like, you know, it could be eight years, right? We don't know for sure. So, but that's just like, that's just kind of my view. And I base that like on close to nothing.
01:02:04
Speaker
You know what I mean? Like I have, I have some things to kind of support that view, but it's just like, it's impossible to predict exactly what's going to happen. And like, I say, i I preface it with that disclaimer because it's like, no one could know what would happen.
01:02:20
Speaker
So the thing is, we've never seen it before. like we've We've never seen before what Bitcoin or crypto would do in an environment where stocks don't go like up only all the Exactly.
01:02:32
Speaker
And there have been times in the past or even like in Japan or whatever. What like what what if stocks just go sideways for 10 years? Exactly. like Yeah. yeah like That's that's like my greatest fear And like that's kind of something that I want to protect against because it is my greatest fear.
01:02:49
Speaker
I mean, the
Global Market and Currency Dynamics
01:02:50
Speaker
likelihood of that happening is, you know, we don't know. Like I couldn't i couldn't say with any degree of certainty that that's what's going to happen. But I mean, how many times... How do you protect yourself against that?
01:03:05
Speaker
That's tough. um Having a job.
01:03:10
Speaker
Anti-need propaganda. Yeah, it's difficult, right? you'd have to see like You'd have to see what rates are at. like You'd have to see... like Maybe like you just have to start trading on shorter time horizons, you know?
01:03:28
Speaker
Taking advantage of moves to extract returns without a clear market direction or any strong bias. Yeah. um I think that's one way you could protect about that ah against that. like Owning gold is what worked in the past. you know um and yeah i mean If the USD is being debased, like i mean you already see it, right?
01:03:52
Speaker
You already see central banks accumulating gold. and like That was the signal to just like go long gold. When China was buying gold last year and everything, and like yeah, it's like I mean, the dollar's neutrality was called into question after everything that happened in Russia, right? So, um and you know, you don't exactly have the best president for, you know, dollar neutrality, kind of like global trade. Like, like ah ah like you don't have a president that's like thinking along those lines.
01:04:32
Speaker
You know, like, that's just, like, open to global trade. it's like, no, like, he wants to put put up tariffs, right? Like, he thinks America's getting a bad deal. Like, um he wants the U.S. dollar down.
01:04:45
Speaker
yeah You don't have any ah dollar, bull, copium, copium for me. Oh, well, no, I mean... I mean, if anything, the dollar does... The dollar does always does well against other fiat currencies, right? Like, I know it's down now, and like it'll probably continue going down for a while.
01:05:03
Speaker
um You know, it's clear... It's clear of what the Treasury wants. It's clear what ah the President wants, you know? um the The Fed's are about to cut interest rates into economic strength and has made one cut already. So it's like, well...
01:05:20
Speaker
you know, the US dollar is going down, right? And like, that's not necessarily a bad thing unless you denominate a lot of your net worth in US dollars, right? But like, it it isn't, right? this sort of thing Like the US dollar is like used in so much global trade that it's like the price going down means everyone's liabilities get cheaper.
01:05:40
Speaker
So it's like, it lends to like more global trade and business activity. Now, granted, with tariffs, like global trade, slows down a bit but like you know all these all all these basically companies that engage in trade using us dollars right like that's so good for them that's like unbelievable for them if the the us dollar is getting cheaper so i don't know it's it's a weird one i i think like
01:06:17
Speaker
The trend is down clearly. i mean, we it popped popped against JPY recently within the last, like, what was it? Can I see that?
01:06:29
Speaker
I remember, yeah, like after after the FOMC, right? Like, the dollar sold off, but then immediately retraced and went to the range high. So it's like... yeah I don't know. I think you get pops. I think it's going to be just kind of choppy and rangy for a bit before it picks like a clear direction. But like already had a massive move down in the US dollar. Like, you know, people that actually trade Forex were definitely offside as far as like ah includ shorting the US dollar, like expecting this thing to go straight to zero.
01:07:04
Speaker
And it's like, yeah, like, like you had a, you had a massive rally in June in the dollar. Right. And that was like, I, that could have been short covering that could have been all sorts of things, but it's still, again, like, you know, it's still kind of in a downtrend. Like we traded lower, you know, we got a bounce. So see what happens. Um,
01:07:26
Speaker
Why are you worried about your own US dollar position? I mean, I'm, I'm, uh, as I guess many people in crypto very ah dependent on dollars or like denominate most of my, my stuff in them. And, uh, as a European, that's, uh, yeah, ah they I mean, the, the euro is going up, so I'm, I'm just like losing money on that, which is, which is not great.
01:07:50
Speaker
Yeah. Um, I mean, it's, it's so sad too, because it's like, yeah, the euro is repricing against the us dollar, but like nothing is getting cheaper. Yeah, pretty much. It doesn't really doesn't really do anything. but Yeah, i don't The US dollar is is such an interesting thing.
01:08:09
Speaker
like i mean, I won't talk about US dollar too much but like when you think about like the us dollar and how much stuff is denominated in us dollars and how the us s dollar underpins like the entire system of finance and global trade and everything it's it's really quite funny that like people aren't more bullish on the us dollar and i don't mean bullish like oh this thing's going up and i'm going trade it but i mean like just in the sense that like
01:08:41
Speaker
you know, like U.S. dollars will probably always have value in some way, you know, like, and that's like that whole thing where it's like, oh, the U.S. dollar is going to zero. It's like, well, yeah, in like very hyperbolic,
01:08:53
Speaker
ways it is going to zero. But like if the US dollar was going to like actual literal zero, like you're going to see other currencies and even countries fall before that happens just because of how like systemically important US dollars are to absolutely everything. so um I think it is quite noteworthy, however, that we, like, if you look at the the Bitcoin Euro chart, we haven't made a new high yet. that's telling.
01:09:22
Speaker
and something that That's something that I look at, too. It's like, yeah, no no new all-time high in the Euro chart. it was It was close, though, if I remember.
01:09:33
Speaker
going to actually pull this up. It was very close, but but we pretty much, like, double-topped. And then, yeah, and retraced, yeah. um What else was doing? Wow, I can't remember.
01:09:45
Speaker
Yeah, yeah that's that's also a funny one because like yes versus Euro is like a funny chart because it's like, yeah't know even though the S&P is making new all-time highs, you know what I mean? Euros that bought the S&P are down.
01:10:05
Speaker
Yeah. but that that that' That's something I realized too. Like I put a bunch of money into stocks in in around April or something like that. And then it's just like, I saw the SMP like making new hires every day and whatever. But then I realized like, oh, my money is actually it's actually not going up. It's just like staying the same. I mean, like,
01:10:26
Speaker
That's like a good bear case for the U.S. It's like, well, I mean, if the U.S. dollar is going down, why would people buy U.S. equities, right? If they're going to lose on like the Forex leg of the trade. I mean, like there's obviously ways yeah ways to hedge against that, but it's still like, you know, it's it's something to consider, right?
01:10:48
Speaker
Because yeah for um why like why would you, you know, like, um That was, yeah, that's that's that's one of those interesting things too, where it's like, yeah, like you can get some signal out of that. And it's pretty funny when you actually think about it too. Cause like, I can just imagine, you know, Klaus, like he's long, he's long the NASDAQ, long the EES, and he's down 5% on the year, despite the fact that this thing just keeps putting in new all-time odds.
01:11:17
Speaker
Yeah, that's amazing. Yeah, I think it was a huge narrative earlier earlier in the year, like ah the docs just making new highs or whatever, or like performing better against the U.S. indices. And then also like these these talks, some talks of like capital controls or whatever for, or that they want to like tax people more on in like other countries if they buy U.S. stocks to like disincentivize them yeah and stuff like that. And like, ah you know what? Like that's probably the biggest problem with Trump's kind of geopolitical financial strategy is that like these guys are literally allowing the government to fund itself in the U.S. You know, just by buying U.S. equities, buying U.S. treasuries, buying, you know, like America being the world's banker,
01:12:05
Speaker
was a strong point. And the
Developing Trading Skills and Tools
01:12:08
Speaker
problem is, right? and like it's It's like two sides to every coin, right? like You're not going to fix things for the average American if that's the case, right? um If you know America continues to be the world's banker,
01:12:23
Speaker
But at the same time, like that was like the one strength that your country has. you know um It's really, really funny. um The global reserve currency, too, is like not a great spot to be in. right um like If you look at the Triffin Dilemma, for instance, like that's like that's something really interesting to look at. I mean i don't know like i don't know how well-versed people are on these on these kinds of things, but like, if you have the reserve currency,
01:13:00
Speaker
it's never gonna be good for your population because there's gonna be so much demand for US dollars outside of your country, like more almost more than inside of the country and probably more, right?
01:13:12
Speaker
To the point where it's like that thing just needs to devalue and people that earn and denominate in US s dollars are gonna suffer through that debasement and devaluation. So, i mean, that's like one part of the Triffin dilemma.
01:13:26
Speaker
and It's really interesting when you like like think about it um in terms of like global finance and like global economics and how you're going to actually like Like, ah obviously, like, it's you can't trade that stuff, right? Like, this knowledge isn't really useful for trading, but it like it is if, like, you want, like, a better view of the world and you want, like, an informed worldview that accounts for why people do things, do the things that they do, you know? so Yeah, for sure.
01:13:59
Speaker
But, yeah. that's that. Yeah, i guess as we're coming to a close, do you have any any closing thoughts? Is there anything else that you want to want to talk about? Anything else that you want to say?
01:14:12
Speaker
Anything you want to plug? Yeah, well, I mean, the biggest thing with trading is you've got to find what you're good at and really lean into that strength. um you know You can learn a lot from other traders, but unless you actually have strength in that domain...
01:14:28
Speaker
you know you're not going to be making any money and you're not going to be putting on good trades right until you actually figure it out what it is that works for you and what your edge is, especially in discretionary. um you know like There's a huge push I've seen for people to be more quantitative about their trading. And I think that overall that's good.
01:14:49
Speaker
But you know like you know the top 1% of discretionary guys make so, so, so much more money than what models you can build.
01:15:01
Speaker
But I mean, that takes years and years. um Yeah, so just like find that edge and just like really, really frigging hammer it, right? like Who knows? like Maybe you can only trade the one minute chart and that's what you're best at and that's what you should stick to then because you're getting returns, right? But it doesn't mean you can't buy the S&P or buy Bitcoin Bitcoin.
01:15:23
Speaker
and just hold it for the long term. But, you know, like your goal is to get returns out of markets, like find what works for you, find what works best. Maybe, maybe you do have an edge reading positioning and as a result can apply macro thinking to that edge to take advantage of mispricings like that and positions being stretched.
01:15:45
Speaker
You know, it's just, ah it's one of those things where it's like, you got to spend the time, um you got to spend the time really, really, really drilling down into what you're good at. And like, sometimes the only way to do that is to actually trade, you know? um You can read books and books are helpful, but they won't make you a good trader.
01:16:05
Speaker
You can listen to traders and watch analysis and that's helpful, but it won't make you a good trader. um You know, you can trade on your phone and that's like, like the actual,
01:16:20
Speaker
It used to be so hard to start trading. Like, it used to be really, really hard. Like, where I'm from, like, before you can you could take, like, before crypto, the only way you could take intraday trades was to have, like, $50,000 as bankroll to be able to just, like, start trading this stuff.
01:16:39
Speaker
Which, like, I i think is crazy because, you know, it, like, kind of...
01:16:44
Speaker
It kind of um puts a ceiling on what you can do with like a small bankroll, right? Yeah, before all the neobanks and brokers. Exactly. So like you kind of have the advantage of being able to just start trade to start trading things, right? um And to be honest with you, like I don't think you should be trading on your phone.
01:17:07
Speaker
but But you can. You can. If you like absolutely must, you can. um But you got to just start doing it only Only on the coming in Silico terminal mobile. Exactly. Exactly. Like, I mean,
01:17:23
Speaker
Tools are definitely an important part too, right? Because you've got to have the right tools, right? like You can't just be looking at TradingView and like placing trades based on that. like I mean, obviously you can.
01:17:36
Speaker
You might be profitable and you might make money. But like having having good tools is like really, really, it is actually a game changer. like you know like ah if Especially if you're doing things on low timeframes, man. You need...
01:17:49
Speaker
you need you need good execution because you're constantly like you're competing against literally guys that have like millions upon millions of dollars invested into their setups to get the best execution, like sub millisecond execution and like all this stuff. So it's like, if you're like, you know, it's like, again, the funniest thing is it's like, it's like playing, a it's like playing tennis against ah a tennis pro only you're you've got a fucking dildo, right? here So, um yeah, like good tools. And like, you know, I'd like, I love the terminal, to be honest, for that. Like that, like really, like ah the terminal taught me a lot about like trading intraday and scalping and things like that, just because like the tools are good, you know, like you can set it up exactly how you want and you can do like you can do anything.
01:18:41
Speaker
Anything you could do like professionally, you can pretty much do on the terminal. So why like but wouldn't you use a free tool that just gives you access to that?
01:18:53
Speaker
i think I think
Conclusion and Personal Reflections
01:18:54
Speaker
those are great words to end it on. And it's also only going to get better as we improve it more. But yeah, thank you very much for for coming today. No problem. Thank you for having me. Talking with me. It was very insightful, very interesting.
01:19:08
Speaker
And yeah. right. Well, have fun. You know, have fun in Singapore. That'll be a good conference. ah we And yeah, ah keep making those vlogs, man.
01:19:21
Speaker
Really fun to like, dude, they're super comfortable to watch. Honestly, like... we love Well, I mean, like, it's one of those things where it's like, yeah if it's just a random vlog, I probably wouldn't care that much.
01:19:33
Speaker
But because like, i'm actually interested in the person making the vlog, it's super cool. And like, I've never been to China. So it's like, ah like, it's pretty, pretty crazy seeing, seeing a lot of the the stuff that you're vlogging.
01:19:47
Speaker
i appreciate that.