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StonXBT: Turning 3K Into 800K, Prop Trading, Risk Management & Macro
136 Plays20 days ago
StonXBT joined the Insilico Terminal Podcast to talk about his path from early crypto, learning market profile and order flow, trading on a prop desk, and building a risk-first approach to markets. We covered scalping DOM and iceberg orders, why most traders skip real source material, how he thinks about position sizing and leverage, turning £3k into £800k, and why the biggest returns usually come from boring trend-following rather than constantly chasing trades. We also talked about Bitcoin, Hyperliquid, crypto losing its original identity, macro risk, oil, AI, the carry trade, and why markets can keep going up even when the world looks unstable.
00:00 Intro / how Sokio first found Ston on CT
02:04 Ston’s origin story and getting into crypto
12:14 From random TA to real risk management
15:36 Scalping DOM, icebergs, and BitMEX execution
20:21 Why risk management matters more than the strategy
24:44 Why traders should read source material, not Twitter summaries
34:21 Hyperliquid, crypto’s identity crisis, and real use cases
42:38 Macro, war, oil, and why markets keep ignoring risk
01:04:12 How to make big returns with BTC/ETH and trend following
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Transcript
Introduction and Early Experiences in Crypto
00:00:12
Speaker
Welcome to a new episode of the InSilico Terminal podcast. My guest today is StonXBT. um I want to start with like a quick funny anecdote, actually, before before we like properly get into it. because Back in 2021, when I ah first started being on Twitter, i i started like following people. I came from Reddit. That was like the only thing I knew about crypto. So I saw on on Twitter that people actually had more reasonable explanations for why price moved and and did things rather than just being on Reddit, where it's like random narratives and no cohesion whatsoever. so
00:00:55
Speaker
I started reading all of this stuff and it kind of made sense, like open interest and everything that we like learned as a trader. But back then I actually didn't really understand um why perps existed or like why people traded perps because I understood like spot as a concept, like why it's pretty like self-evident, but I was like, why is there a need for perps?
Trading Journey and Learning Experiences
00:01:19
Speaker
um Which is very very silly like from Noway's perspective because it's so obvious, but back then I didn't get it. And what the reason I'm telling this story is because ah I remember I followed your account back then. And below like one of your tweets, I replied, is the difference between yeah i don't think i don't think you replied because the question is kind of retarded but it's just like stuck stuck in my mind uh but i don't i don't i don't blame you for that no i'm so sorry that's actually really sort of like no because i think i think that
00:01:57
Speaker
That's a bit sort of embarrassing because like my purpose on being on CT was being able to sort of learn and also then share things with other people. So I'm going to get back to you then. No, it's fine. I got it eventually. Fair enough. Fair enough. Yeah.
00:02:16
Speaker
ah I guess I skipped the introduction now a little bit. Can you can you introduce yourself for for listeners? um So yeah, StoneXBT, I've been trading, proper trading, on and off for like since, um I want to say 2019, so about seven years. um Of those two and a half, three years were like really intense full-time trading.
00:02:41
Speaker
um got involved in crypto in 2017 because um of Silk Road actually and I was i would like like a young teenager, old teenager, I would like look up to try and buy some stuff and be like, oh, I'm buying this stuff again and again, but the amount of BTC that I'm needing is less and less. And I was like, why why is this? And then I realized, like, Bitcoin was going up. um And then i think as as everyone does,
00:03:13
Speaker
Ignored that for the two years from 2017 to 2019 and so for some reason got into um crypto and ah did what most people do, just sort of like buy something that everyone's talking about on Reddit or Twitter and then sell or or lose it all or or whatever. um So that sort of like was was the phase when I got into crypto as a thing.
Mentorship and Advanced Trading Concepts
00:03:40
Speaker
But in I think it was in 2019 when I started interacting with people like InSilicoTrip and CryptoParadigm, a lot of different people then.
00:03:54
Speaker
But I still vividly remember. still Still no structure or framework, no understanding. As we were discussing earlier about like open interest and such. None of that like ever came to me. What about, I still remember though, like the first thing that I actually like really looked into was babypips.com. I'm not sure whether you've seen that. It's like a website which tells you. So it was like an online website which would like show you, oh, this is a dragon stick or this is a falling star or this is donkey. Oh, like the technical analysis stuff. Yeah, yeah. like like did like Like just the vocabulary of things. Yeah, I see. Moving average means this.
00:04:26
Speaker
um And then I think briefly during all of that, I saw some videos from ICT, Inner Circle Trader, which sounded like the Holy Grail, but is most of it is absolute bollocks. Yeah. Yeah.
00:04:39
Speaker
And then I remember something. It wasn't clear. it was this, i think it was sheer luck. I um accidentally, do you know Horse? Ryan Horse. ah Yeah, yeah. He was a trader here. So ah I honestly, i owe all of it to that guy. i as a reply guy, got into a really big argument with him saying that, oh, you just sort of make this shit up blah, blah, blah, blah. bla Really? Yeah. Yeah, yeah, yeah, yeah, yeah. And I think that really pissed him off. Like, I think I think i must have hit a nerve. I was actually being rude. ah as It's all my fault. But I think it bell did hit a nerve and he got really angry and gave me a really angry reply. yeah and me being like um an early 20-something boy who, I like to think I'm good at heart. So I felt really bad because...
00:05:29
Speaker
I felt really bad for being so mean to him and I actually got hurt by what he said. So then DMed him and said, sorry, I didn't mean to do that. but And that guy is, um he's actually a really good role model. Like he changed my life. He took me under his wing.
00:05:43
Speaker
i think I think he probably felt a bit sorry too for being so mean. So he got me into his Discord group. And and to to to sort of caveat that I had been in Discord groups before, paid out of my pocket and such, and all of all of them were crap. They were like calls, buy here, sell here, none of it worked. It was just all like a scam. But I got into his group, and it was actually very eye-opening, like um concepts about market profile, about order flow, about footprint charts, um read this, read that. And I think that sort of like really set it off. um
00:06:19
Speaker
So, i I've always been a book guy. Like, I love reading books. So, I bought um Dalton's books, um the the the market profile books. There's actually two of them, come from the top of my head.
00:06:32
Speaker
um But I read those two books, and it really changed my life. And... And after that, I went back and I read, I literally, a this might sound silly to so to to you, but I like went back and read books on RSI.
00:06:45
Speaker
Like, what is RSI? How does it mean? What do people use it? And actually, um just to sort of throw in something here, this is just stop me from rambling at any point, okay? No, it's fine. It's fine. Go on. People say that...
00:06:59
Speaker
Um, below 30 RSI, just for example, say below 30 RSI is oversold, so hence you must buy. So if I, when I went back and read this book, RSI below 30 only happens in downtrends. So that means the momentum's too strong to the downtrend and conventional wisdom says buy then, but it it it just doesn't work. it was a lot of like different, reading different books on different, like the Ichimoku indicator. and from there on building my own system and practicing. um And then around that time, around 2020, 2019, got in touch with so one of my um friends in London, school friends, who... i went into a different field of
Reflections on the Crypto Market and Its Challenges
00:07:42
Speaker
education. um
00:07:44
Speaker
And he went into the better field of education. He went into finance. And his ah he knew a friend whose dad ran prop firm. And they were like, this was COVID. I needed somewhere to say. and they these guys were like, why don't you crouch the barbarrantt crash on our couch? And I went there, read these, but but while I was reading these books, and I was just out of curiosity with these guys. Like, can I prop trade on your desk? And they gave me a six-month probationary period where I paper-traded money. And after those six months, when I was consistently profitable, I started trading their money and keeping about, i think, about 30%, 25%, 30% of my own money. that Was like wasn't like a ah a crypto prop firm or just like?
00:08:26
Speaker
ah Just general, think, but but a a large volume was, and and certainly my large volume was crypto. So I would say about 80% of my volume was crypto. um But it was it was sort of like looking for high beta returns. Mostly, mostly...
00:08:45
Speaker
ah Similarly, um sort of like movement and alpha as the SPX, which is higher beta essentially. So it was mostly like stock, tech stocks and crypto. um Essentially, I think at that point, it was like that look, which I'm, I think I'm getting into it more now. At that point, some people on the desk, they talk about um the bond market, which at that point made no sense to me. Bear steepness and bullies, it still doesn't make much sense to me. It's quite complicated. It is. is but ah but but But what I suddenly realized now, especially with the whole the past six months, with the whole geopolitical unrest, like the people the the stock, the bond traders are the most intelligent traders in the market. And when they said something is wrong, I listen.
00:09:37
Speaker
um so So that's essentially my story from up until 2021, 22. Mm-hmm.
00:09:47
Speaker
And then during all of this, it was it was it was good money. um like so Like, in my current field of work, the amount I make in a year, back then I was making in a month.
00:09:59
Speaker
And it was actually good. I saw a couple of things where I think, A, the the landscape was shifting. um People were becoming more... I mean, it it was always quite scrummy. Like, people in 2000... not sure whether you remember the name Ian Bolina.
00:10:17
Speaker
So no that guy, he was from the ico era ICU era. So he would sort of like sell shell ICOs on EtherDelta and he would put your money into this and make loads of money. And it was limited. It was still scammy, but is limited. But i think in since mid-point of COVID, the whole KOL scene, the sponsorship scheme, It became, i think a lot of other people came in and since then become more and more progressively more and more um full of grift.
00:10:51
Speaker
like Like even now, even the the head of US government is involved in this grift. Like this is... It's pretty bad, yeah. It is. It's pretty bad. And that's why I think crypto is not performing as well as it.
00:11:04
Speaker
It doesn't have its own base case. Earlier it was, did not belong to a government, had its own story, was under no one's control. And I think it's lost a lot of those things now.
00:11:17
Speaker
Unfortunately, yeah. Like right now, that the the rhetoric before the crash was, before the war was, ah Bitcoin is a high beta tech stock. That was the whole thing, wasn't it? Now, tech stocks are going up, but Bitcoin isn't. And I think that's because tech stocks have a catalyst. They have earning calls inbuilt in them. They have this whole... ai capex growth inbuilt in them so they get this drift whereas i feel like bitcoin doesn't have any of those catalysts it doesn't have a learning score the only thing it has is is a halfening cycle yeah um and it's it has i think it's lost its way so it has it hasn't gone the digital gold side but it hasn't gone the tech stocks id it's just somewhere in the middle for now
00:12:01
Speaker
Digital grift. Yeah, essentially. and and i want to I want to ask a bit about your your ah trading
Evolution of Trading Approaches
00:12:10
Speaker
back then. and like you You mentioned that you looked at all different kinds of ah ways to look at a charts and indicators and stuff like that. And then you you went to the prop firm and ah got like profitable after some time. And I want to ask a bit more about how your trading looked like back then and like what you what you were looking at in in the market yeah and how you grew over the time.
00:12:32
Speaker
um So I think initially it was very much like before sort of like reading those books and the prop form and such, it was very much like, ah not and it wasn't systematic. It was like um trying to vaguely draw a head and shoulders or a bull flag. I so i still don't, I don't believe in bull flags. I don't believe in head and shoulders, but it was more of like drawing those back then.
00:12:58
Speaker
um looking at moving averages, probably experimenting a bit with like Ichimoku clouds, which still stay in my current system actually. um And none of it would work. It was more like coin flip. And i think I think it was less about...
00:13:15
Speaker
Although my style has evolved a lot since then, I think it more about in the emotional aspect of it and and risk management, which i think i I think you can have a crap trading system, but you need to have a stellar risk management. like no if you five here If you have the best trading system in the world, which like has a very high hit rate, but no risk management, it's's it's going to blow up. So, yeah, I'm digressing back to that thing. So, as i started reading these books, and I initially started a lot with um um volume profile and market profile and footprints. And i think at one point of time, when I passed that probationary period and actually started trading, i would say about...
00:14:03
Speaker
I was balancing my book, so I would still have a long trade running just to sort of like, say if, um for example, Bitcoin was an uptrend from, um say, ah which one was it? 3K 20K. That was the before, but it was an uptrend. So I would try and keep like long momentum following trade on to give me a bias.
00:14:27
Speaker
And then I would... um take either similar like same trend or counter trend trades to mitigate loss or add on to my profit and a lot of that was um on the daily time frame was with profiles so like profile compression, um weekly profile, and then daily profiles compressing into that. Or if the daily profile reached the either end of value, then putting a trade on for the other side of the value. And eventually, as the compression would progress, I would put on a momentum trade, which is based on Ichimoku, which again is a moving average complex. oh Yeah.
00:15:06
Speaker
And on top of that, um I would spend about, say, from NY, New York session, open around 2 in the afternoon to like 5, and then the close, ah have a lunch break in the middle, the close around um in the evening. And that was mostly, which was actually the most fun bit of it, was looking at the depth of market. Back then, it was actually really easy. Having said that, I haven't looked at the depth of market in a few few months now, actually. But back then, was really easy because, especially when Sailor was, like, buying initially, the the techniques weren't very slick. And I feel like since then, a lot of more sophisticated players, like Jump and Citadel, have come in. But um a lot of it was depth of market by...
00:15:51
Speaker
um you would you You would look at the the ladder um and the price would keep, so for example, like the price would keep hitting this one level and there there wasn't an order and it would click. if ah have I've got some old threads on this actually, some gifs that I've recorded from a live trading session where um it keeps hitting that level which doesn't have a lot of volume to hold that bit back. but it keeps bouncing back and this this clip keeps on clip re refilling at that. And then, let you know, oh, there's an iceberg there. And what you do is you start front running that iceberg.
00:16:24
Speaker
yeah ah Until that iceberg gets annoyed of you and then this iceberg friendss from the front runs you. And that was that was actually a really good way of, like, making money really quickly, depending on your size. I think the only issue back then
Comparing Trading Styles and Risk Management
00:16:39
Speaker
was... um only BitMEX had the micro, the the the the matching engine to support this and only BitMEX had the Sierra integration to give a proper depth of market. The Binance matching engine, I'm not sure how it is now, it was awful back then, it was absolutely shit. um
00:16:59
Speaker
And that was that was another reason why i sort of moved away from um after after getting comfortable. but I had a decent bunch of money saved up. And I was like, it's i'm I'm literally picking pennies in front of a railroad because I can't i can't deploy size here. um And then i did trade the es for ah for a few months.
00:17:22
Speaker
um But I feel like the the system there, the the competition there is much fierce because you didn't have the, what are they called? The sort of algorithmic,
00:17:35
Speaker
um the firms like Jump who like operate in like microseconds and such and like literally they have the servers right next to the exchanges matching engine servers so that the competition is just really really tight there so that wasn't the reason pulled back but most of most of my money I would say honestly most of the fun that I had was from scalping like these Two, three second trade, big under the end big order in, jumps back, big order in, jumps back, identifying a nice book, working around these trades.
00:18:05
Speaker
That was the most fun bit. But I think um very unglamorously, the most money that I made was was from simple trend following this momentum trend, breakout trading. i think i think I think that's what most people, not most people, but I think a lot of people look at that, the the sexy side of trading, where it's like someone sat in front of screen, like trading, but the bit that actually like gets the average person money is the slow, boring process of like researching, waiting on your hands, and then trading.
00:18:38
Speaker
What was it like when you, because you went to the prop firm, I guess, quite early in your trading career, so you were already playing with a lot of size, like, quite early, earlier than, like, most people, I guess. So you already have to, like, think about all the the size constraints and what you can do and what you can't do, which most people only have to think about, like, way down the line and after they, like, slowly scale up.
00:19:01
Speaker
Yeah, I think i think that that that that was the tricky bit. And I think i think the other tricky bit was um the fact that it wasn't my money. So that sort of like really does sort of um did weigh down on me back then. And I don't know, this is digressing a bit around that time. My...
00:19:21
Speaker
Some of family members were like, when crypto was like really in the news, they were like, oh, you trade crypto, do you want to trade our our money as well? I was just like, no, I'm not taking on anyone else's risk apart from mine. um But i think I think it was interesting. It was limiting in the sense that there only very few venues where you could say actually size up adequately. So BitMEX wasn't one of them. um I think it would it would revolve around like Bybit and Binance. And i've I've always had a fear of like Binance.
00:19:58
Speaker
um FTX was a decent venue at one point. I think i think their whole, um they did this whole like derivative perps like mid cap perps and small cap and large cap. I think that was really good. um but i think I think the main hurdle was you you want high beta, but the high beta is there because there's no liquidity.
00:20:22
Speaker
But then and and if there's no liquidity, you can't deploy enough size to make use of that high beta. That that was one challenging bit. And I think the the the make, apart from all is that, the the main key takeaway that I got was risk management, like managing your risk. Because as As I said earlier, you could have a brilliant strategy. If if if your risk management is crap, um you you your firm's going to go tits up. Like, did you see in the news recently, there's really good, I can't remember the name, this um firm was trading Brent over the past month and they've lost 50% of their working capital. can't remember then. It was in the news recently.
00:21:03
Speaker
um i'm not sure if I read more of this. No, so but it was a I think i'm I'm surprised because like we like everyone on on this prop prop trading, the the smaller ones you don't, but with this one we we did have a risk manager. You would sort of like look at your parameters and see what you're doing and see where you're getting at.
00:21:22
Speaker
People might have like different approaches to managing risk, but but even with like that size, um my sort of risk process was depending on the conviction of the rate, of of the trade,
00:21:34
Speaker
having sort of like risking 1% of my my account at that point could or going up to like 5%. But then that would also depend on the time frame I was trading. If I was like scalping,
00:21:49
Speaker
um I think it all really works in tandem because if you're scalping, your book's really thin and your conviction's equally lower. So you sort of slide down to like 0.5% of your risking 0.5% of your account.
00:22:01
Speaker
ah risking point five percent of your account yeah on a certain trade. But if you're, say, trading on the on the weekly, like, i um um I've got this wheat trade open, which is, i think we'll run for it months, if not um a year or so. And in that case, I'm more happy sort of like going two and a half, even 5% of my account in that scenario.
00:22:23
Speaker
Um, but it was nice. I think the the payout was nice as well, working in the prop firm. I think, um, it's, it's I think either starting out, if if someone really wants, like, actually,
00:22:43
Speaker
ah find I find it really funny. This is a bit of a digression. I find it really funny in that, say, if you wanted to do work, even as a bricklayer, for example, you would do an apprenticeship. You would you would learn how to bricklay. As a competitor, you would learn how to do the basic bits and bobs. Whereas in trading, I think there's always an option to like read books, get trained, and do it the right way. But I feel like very few people actually do that, a lot of them, because the access the the the access point is so low. yeah People just go in and start betting money.
The Importance of Education and Trading Fundamentals
00:23:12
Speaker
um So think like ifs if people can, think at the bare minimum reading about it, reading actually source material, good books like like Jim Dalton or really helps and if if possible, like I understand TraderMain's got a prop firm now. I think that's the other end of the spectrum. It's nice if you can get into a prop firm and get some experience because My biggest thing that I took out from that prop firm was not having loads of money to trade. That that did help. And eventually, i got from my share, I got enough to just say that I'm done. I'm just going to trade my own money and I'm going to go and live my life. But I think that that wasn't the biggest thing I got. The biggest thing I got was actually being around other traders, see how they're doing, see how they're managing the losses, what how they blew up.
00:24:05
Speaker
Why did they blew up? Because equally, that there have been, there were cases where I was like, oh, God, I didn't realize that that that't realize that they were trading a relatively liquid um asset at a bad time. And when they actually had factored in the loss of like 5%, the loss ended up being 12% just because of slippage and no liquidity. So I think i think it's it's it's a lot of good things to sort of like pick up working on a crop firm.
00:24:32
Speaker
And I think between those two ends, like with the books and the crop firm, going into a group and... this this can be hit and miss but going into a discord group where you don't get a single call no one gives you a call just give you the process of like why they're doing something is massively helpful I think yeah And i'm I'm not saying this because I've read this in the book. Because, i'm like, right now, I do have some free time on my hand.
00:25:03
Speaker
And I, it's actually genuine. So, right now, I'm reading this book, um this options book ah by Sinclair. Because I feel like that's another thing I want to learn around my repertoire of things.
00:25:15
Speaker
So think i think I think it's quite key to like get some formal experience in this because I would not want an untrained plumber to do my sink if it's not working. It's going to fuck things out It's actually kind of insane that we like ah like no one would, as you say, like get an untrained plumber and like an untrained doctor or anything do anything for them. But you would you would train like you you would go use your own money as an untrained person with the risk of losing it, which is kind of insane to do if you think about it like that.
00:25:51
Speaker
And I feel like the the the the the dynamic changes, like, if you're, like, 16, 18, 19, 20, it's to, trade your money, lose it. Like, I, when I started out, like, it was it it it wasn't massive sums. Like, when I started out, it was 3,000 pounds.
00:26:09
Speaker
um And I probably lost that, like, thrice over with no structure. um But by the end of this, like, when I was sort of trading and then... um before I got into the prop firm. So when I was reading those books, and I think i think it was also, it's difficult to say whether it was the the the luck of the market. But I still had the whole sort of like um system of following my risk and making my judgment.
00:26:36
Speaker
it It wasn't difficult to run up like three grand into 800,000 pounds. you You don't really need... I didn't i never traded all. All I traded was Bitcoin and Ethereum.
00:26:47
Speaker
And then I went up to this prop firm where i was like... um And my friends my my friend knew him. So was his friend's father's prop firm. And I was like, look, I've got this track record. I've got all of these. And they still didn't trust me. They were like, you need to do a probationary period of six months or just trade with us, which makes complete sense. um But i think I think it definitely has a um has an edge. People who actually understand the source material, understand the real thing. It's easy to become an amateur expert. People like these days, they become an amateur expert on the whole um stra of Hormuz closure and why it's affecting things. It's easy to do that. And think it's important, especially if you are a crypto trader, I think it's important because crypto has become a ah global macro asset. But instead of like reading stuff on Twitter which someone else has said, which someone else has read from somewhere else, I think it's important to go back to key material and read the actual books, which a lot of people don't do. So even in my field, where the my non-trading field, people...
00:27:55
Speaker
come up vi with practices or opinions or whatever, and they have read this from their senior and they have read that from their senior and very few people actually read what the current latest research or evidence is.
00:28:10
Speaker
I feel like AI kind of has made it even worse. like yeah for For me personally, I think stuff like this, like listening to podcasts with people to pick their thought process a bit so you can like kind of... Podcasts aren't really for like, hey, I'm going to like teach you how to trade my strategy or whatever, but to like understand how the person thinks. so that's yeah That's what I find interesting about it. But also i kind of made it in a way where it's like... um everything on the internet is kind of like slop now.
00:28:37
Speaker
No one really like understands stuff properly anymore. and like you apart from trading, if you're like in in whatever else, like if you read philosophy or whatever, like there's so much content on everything. You can find YouTube videos and and articles. Everyone is writing Twitter articles. You can find stuff on everything.
00:28:55
Speaker
But I think the source material is like almost always just like way better because you actually have to like form your own thoughts and like content with the ideas properly and not just be like, hey, this is the simplified, stupid version. Also, if you don't know what you're doing, like this happens to many people and it happened to me as well at the beginning when when I came to Twitter.
00:29:15
Speaker
um Since I didn't even know like what what is the difference between like Spot and Perp, I also like followed all the big accounts and everyone that is like talking about all sorts of stuff. and it's very easy for it to seem like people know what they're talking about yeah when they like don't at all and like that's something I don't know what I'm talking about I'm i'm not really like a good trader or whatever but it's like if you spend some time being here like learning all of these things and like actually trading looking at the markets looking at charts like seeing the order flow and whatever then you kind of realize like
00:29:48
Speaker
some people don't really like know what they're talking about and they just have a big voice and you use smart words and whatever and it kind of sounds cool but it's not really ah that that well so I think that's very good advice to say like hey go read some some source material and actually like understand what you're looking at what the indicators actually do what the what the stuff is like actually showing you Definitely. Yeah, definitely. they um Like, honestly, that the like I think it's probably one of the more used, just to sort of like exemplify what you said, I think a lot of people use ah RSI. Like, ah I don't think a single trader gets into the world of trading without coming across RSI at least once. And
00:30:30
Speaker
i i'm not saying i'm and i'm I'm not saying I'm an expert on RSI, but I've never seen anyone use RSI the way it's meant to use. like saying and enough Just for example, saying say in an uptrend, you want it to remain above 66.67. The moment it comes down, I'm like, I am going to like leave this trade because it's not going to work. Whereas yeah the conventional wisdom is, oh, it's above 60. It's short, short, short, this RSI for like, ah it's overbought or whatever. But yeah, I think i think people skip that. and I think it's made worse now because even um it's it's like the young people, that are the the the people that I work with, the new sort of trainees who come in, the they don't read books either. I think it's possibly also because of social media and such. and
00:31:21
Speaker
um I'm not saying like I read loads of novels or whatever, but but like reading, say something by Ewan Sinclair, um options, volatility and trading and strategies. you You can't get because it's so dense. Someone has sat down to like put that dense amount in a book in a concentrated way. You could can't really find that out anywhere else.
00:31:42
Speaker
Mm-hmm. Yeah, and and I think that's another thing that I ah feel like probably trip has sort of pulled back with. Like Trip used to back in 2020, used to online share a lot of um education stuff. I used to share a lot of own education stuff.
00:32:01
Speaker
And I can see, um I'm not sure whether he's going to watch this, um Stoic is is doing a brilliant job. yeah I can sense a sense of frustration from him where he's putting out good material, but it it often gets overshadowed because people want to find out the next ticker with the buy level for the next 100,000 X that they'll make, which unfortunately is how things work in finance and Twitter. Yeah.
00:32:31
Speaker
Now it's it's kind of sad. It's something that I've like thought about lately a bit as well. um I think for me, like to to do something like this podcast, for example, it's like if I didn't really like doing it and wanted to do it, like if I only did it for like money or like recognition or whatever, I don't think it's like a good thing to do. Because, or even just being on Twitter in general, like I know many people that have like kind of withdrawn a bit from the public. They don't want to like, they have bigger accounts. They don't want to like post stuff anymore. that like you mentioned, the education but isn't really like that worth it anymore because it's kind of,
00:33:06
Speaker
Especially because it's like crypto and finance, it's about money, it kind of like attracts a lot of leeches and and just yeah people that want to pee right off of
Crypto's Identity Crisis and Market Dynamics
00:33:14
Speaker
you. and just it It doesn't really feel worth it to just like do stuff for like a public good, for like the the good of everyone, where they can like get something from it, because it gets just destroyed by by a couple of negative actors. which is like kind of like Going back to what you said at the beginning, it's very similar to what happens to crypto as a whole. like i don't I don't know if it like disproves ah the use case of crypto but it it being open and like open to everyone and everyone is like able to do whatever they want with it because there is no state control and all of that kind of also allows all the bad actors to do whatever they want which is kind of ah yeah shitty and doesn't really like do that much good for a society yeah unfortunately
00:33:58
Speaker
Yeah, that's thats that's that's true. but I feel like equally it it can stay independent, but i think I think it's tricky. I think it's a tricky balance to be had because it it it does get diluted by more and more. Like there are some good projects. Like there are some good projects. Like like I think Bitcoin intrinsically is a good project. Like Ethereum is a good project and having that sort of, um but the but the but the TikTokification by say like having pump fun on where you can just make something up and bet on whatever isn't the best idea. I think i think one of the good projects that I, the latest ones that I'm sort of looking at, I think this this is like, everyone's post it'tan polypoly everyone's book is is Hype. I think Hyperliquid is a really good project. um
00:34:48
Speaker
and and the And the way they have sort of set up their whole tokenomics with the etc ah the the Hype 3. and And the way that with that implementation, how they've got um now they've got um weekend Brent crude prices being expressed on Hype. I think it's a good marker. I think it's just, it sort of does like take away, and now enough, enough, and I think with with the hype 4 when it comes, SIP 4 when it comes in, i think I think it'll be good to see with the how will it come compete against Polymarker and Kalshi and such.
00:35:26
Speaker
um But I think its all of this like, the going back the bit about crypto being co-opted and such, I think i think it's just the general,
00:35:37
Speaker
this is this is going to get like really philosophical thing but I think it's all like Jill ties into the sense of helplessness that the younger generation have like oh I can't buy a house I can't buy my i can't pay my rent um oh the way to make money is by betting on Calci or betting on these coins and making that money and I feel like having this putting this face of putting this affiliation with crypto say whether it be Argentina or the US I think goes against the anarcho the foundation of crypto yeah was like no state the the the the the banks bailed out for the nth time and now that's that Bitcoin happens
00:36:25
Speaker
I hope temporarily has become the system instead of being the the alternative to the system. i think things will change, but it's just the... From every front, that there's been this attack on... Because i ah I wouldn't say I'm a trader by heart. Like, I got into crypto because of its anacco cap but like i hit it's its values. Like, you could um buy some Bitcoin, go onto Silk Road, and buy whatever you wanted, honestly. Not because, like, it went up 1,200% in a year. And I think it might come back to that, but also it's difficult to sort of say where we're headed. And I think along the way, um crypto as a whole has lost its identity. So like even me now, like the only things the only crypto thing that i I'm trading is hype because i think it has a good value. tokenomics look good. There's no backhand dealing, not to my knowledge, is going on.
00:37:32
Speaker
um and And the rest of all of it is in equity markets, betting on inflation, lift looking at second and third order effects from hormones, which I think people are really discounting. They're like really discounting all of this, which is surprising because Bloomberg and Wall Street Journal are usually really ah really on top of all of this.
00:37:57
Speaker
But there's not there's not a word from them. Whereas if you look at financial times coverage, it's actually quite on point with all of these second order effects where the markets are completely ignoring them. In fact, I posted this trade earlier. Like, i think The AI got the ai ah spending and Capex's, the data centers are really holding up the economy at the minute, which is good. yeah They're holding it up.
00:38:22
Speaker
Everything's on the up. But I think people don't realize this. America is not insular. It it is energy independent, but it's not insular. And all of these effects from the continued blockade, they have further effects. So something as simple, even as simple as like helium, is used by ASML and photolithography.
00:38:43
Speaker
if you If your photolithography goes up, you don't have enough chips, you can't make enough data centers, um your ai your your whole AI narrative falls apart. That's one angle of attack. Your oil prices go up.
00:38:57
Speaker
USA is in the inner energy independent, but it trades on the free market. Oil prices go up in the US. Your prices for data centers go up. Or the US government puts a ban on export of oil, and that has a completely different set of ramifications. I think the market isn't pricing any of that. It's still trades. It's still sort of like trades in equities and in Bitcoin.
00:39:22
Speaker
I just feel like a lot of the um fundamental narratives aren't really holding up that well. and um And that I've had to remind myself, I was more of a
Geopolitical Influences on Markets and Assets
00:39:35
Speaker
technician. And I think I still am. But I think coming into macro, I started leaning a bit more onto the fundamental ideologies. And I was a bit like, oh, the fundamentals say this, but we've got an all-time high on NASDAQ is above 50,000 points again.
00:39:52
Speaker
What's going on? think ah the the the narrative fatigue is aly like a bit real in everything. And they Bitcoin's narrative is kind of like reflected in the price. It's not like...
00:40:06
Speaker
and I almost think like sometimes Bitcoin's narrative is reflexivity, and that's like yeah all all all there is to it, pretty much, except for it obviously has some sort of a use case or whatever, but there's no intrinsic value. So it's just like, if the price is up, it's good. If the price is out, it sucks. and uh hype is obviously a very cool thing hype is like a very like bitcoin and hype is kind of the only things where i'm like comfortable buying them because they have like some some views or whatever um but i actually want to ask a bit about the the macro stuff because um i think uh your thoughts on on macro are always like very interesting to me and um
00:40:45
Speaker
It is a peculiar situation right now that the market has kind of started to just ignore everything that is going on with the war. Like i expected... i mean, we're always in this this meme of nothing ever happens, like nothing nothing is going on, the world order is like persisting and...
00:41:03
Speaker
whatever, and it kind of seemed like that wasn't the case anymore when the Iran war started, because it's like a very huge disruption to everything, and maybe even like almost the start of World War III or whatever.
00:41:13
Speaker
And it seemed like the the world order would at least be like disrupted a little bit. But now we have gone flip-flopping back and forth so much that like no one really knows what is actually going on anymore. There's like disruption that exists obviously, but the effects of that haven't really
00:41:32
Speaker
been there like that much like in in in a felt way in like real life at least me i don't know i'm a bit detached from real life as well so it's it's not that much but like the the effects aren't really that visible and they're like not visible in the market at all like the market has just ah chosen to ignore it at least the stock market even though oil is still quite high and then there's also this take of like um i't know is Is it really possible for oil to like go to 200 or something? Because if if that happens, then the economy will collapse collapse to a degree where it's like, would drag oil down with it anyway.
00:42:05
Speaker
So maybe there's like, and then there's these narratives about how people use different ways to like get goods around the world and stuff. And like they adapt to whenever there's a disruption somewhere. So maybe we're like moving away a bit more from the Swahdorff and the Middle East in general and oil and all of that stuff. But All of these things are kind of like way more in the future.
00:42:28
Speaker
So what what what what is going on? Like what what is your take on on the situation? will Will the stock market keep rising? Will we just like ignore our way out of this and and everyone will be happy and then nothing will really happen? Like people will buy from elsewhere. It might get a bit more expensive and then we just like forget this war like all the others.
00:42:49
Speaker
ah there's actually a lot of food for thought honestly I've i've been sort of thinking on I've been thinking along the same lines as well because um I think on on the front of like the stock market there was a few things but I did like on that dip down when was that let me see I can pull that up I think that dip down to this is like like 6,500, I think it was like 6,400 around the end of March. I think that was, a bo like personally, I was i was i was expecting like a mechanical buy off that level. that that That's a three-quarterly level from like before. It's a very strong level, markets.
00:43:37
Speaker
are always in buy the dip mode. And on top of that, I think what really helped was that that level was hit right on 31st of March, which, and at that point, what what like CTAs do is they they buy, according to their book, they buy all the undervalued assets. So the S&P being one of them. And then they sell all of the, overall overall or or they take the profit off of whatever they have got. So I think there were some There were two factors already in play there where you hit a significant level, so systematic traders are going to buy that big level. if you've got CTAs who want to balance their books, who want to buy things over cheap and sell things and book profits on the other side,
00:44:23
Speaker
So, did expect all of that. but What I didn't expect was to like literally just go to all-time high. Yeah. i think I think there's a few factors which played in retrospect because High Insider 2020. I think in retrospect what happened was um you you had a few things happening at the same time. You had Trump saying end of war, which um people just want to take us back to normal.
00:44:48
Speaker
um because ah ah because I feel like the impact of the war isn't apparent or the damage is done the effect isn't apparent right now yeah so so Trump said over all good I think there's this like segment from, i got the charts, segment from like November 2025 to February, early March, this trading range, which had a lot of volume. And I think a lot of people like position short off of breakdown from that. yeah There was a bit of a short short squeeze when they approached that level. And as we approached that level, we we came right into um um tech earnings. And tech earnings have been brilliant. So it's just like one positive factor after the other, which literally slingshot this slide all the way up. Yeah.
00:45:42
Speaker
My worry with that is, and I think, um, trader Brian, who's from Axia, Axia, Axia Trading down in London, really brilliant guy, another nice prop firm. They do really good, um, um, training for new traders, really high standard. And they do lot teaching sessions, which is really good. So, so Brian said one thing, which I think I really agree with. You want a move to build structure as it moves on.
00:46:10
Speaker
This move is structureless. It's just there's no consolidation, there's no sort of like back and forth. It's just one big short squeeze and then at the top you have buyers and the momentum's rolled off.
Market Structure and Economic Concerns
00:46:23
Speaker
this This is like on stakes, not to say that this could go on because the stock market is in buy the dip mode. But if it does, if if if if all you need is for a hyperscaler to say, oh, we haven't had the ah ROI we were expecting, and this will all just fall down like a, like a, like a, like a, like a, uh, yeah, house of cards, exactly.
00:46:47
Speaker
um and And also if you look at the how wide the the movement um in in the market, I think it's only the top 20 movers that have actually moved the S&P 500. I think at this point, yeah and I don't know the exact figure, think it's somewhere in the ballpark of 30%, give or take 10, of the US economy is literally AI, which is a big sort of like concentration risk.
00:47:17
Speaker
And The issue with like Hormuz or the whole Middle Eastern conflict is you you have you have the sda iea the international and and IEA, the International Emergency um Agency.
00:47:32
Speaker
They have reserves that people can tap into. Japan has really big reserves that they can tap into. A lot of these, if you if if you look at all the Anglosphere, like Europe, America, Canada, Australia, Japan to an extent, they these guys have reserve capacity.
00:47:50
Speaker
The issue is the places which don't have reserve capacity. so if you sort of go on to like, say, BBC, and you type India oil or Singapore oil or Taiwan oil,
00:48:01
Speaker
People are running out of ah cooking gas, hot liquefied gas of oil there. um the only and its I think it's because of this buffer, um things aren't really bad here just yet.
00:48:16
Speaker
the the And I think that the the market's also thinking in the sense that, oh, we have this buffer for these three two to three months. The conflict will resolve one way or the other. yeah but they don't realize this. Even if the conflict resolves right now,
00:48:32
Speaker
the walls that are shut in the um I'll spare you. so a i love reading, was like read into this my free time. You can't just go and switch the oil well back on, it'll start spurting oil. The oil well needs to be hot and warm for it to spur that out. Once it doesn't do that, the the the the the the so-called wax from the oil gels into the oil well, and it's a more complicated week, or it's not month-long process to get it up and running again. So there's an additional lack time there.
00:49:08
Speaker
um And even beyond that, um stuff like Las Rafan, the LNG, g has been destroyed. It's off for it's all for years.
00:49:21
Speaker
All of this is good and dandy because we are heading into summer, ah especially in Europe. yeah We're going to have a really bad brim right now. we don't we know We're not needing a lot of gas.
00:49:32
Speaker
But the issue is our electric grid is denominated off of LNG. So once we start needing LNG g and we don't have enough LNG, prices will rocket up.
00:49:43
Speaker
And it'll have downstream effects to food and inflation and such. So I feel like Beyond that, I'm not sure how that works because if if you have inflation and if the if the um the companies, the the multinationals, and let this inflation pass through and send it on to the consumer, they might end up having big profit margins and increase sort of like returns and and the prices might go up even more. yeah But I feel like the average consumer is going to suffer and the cost of money is going to go down.
00:50:14
Speaker
um right right Right before our sort of call today, I think the Bank of England sat today, um and they have had like a complete 180. So like last month, the Bank of England, we had a 3.75% rate of interest. And there were some talks about putting it down to 3.5 and such. But today,
00:50:35
Speaker
the the the the the wording was completely opposite. they drew up three scenarios one was hold two of them were raise rates so I feel like the market it does make sense right now because for the S&P to go up because it has all of these positive factors that it can focus on it can say this is all going well and we put all of these troubles under the carpet um for later but think I think it will show up its ugly head soon so like just talking about wheat um
00:51:12
Speaker
Wheat, I feel like has been more sensitive. One of my, someone on X whom I talk to regularly was trading soy or corn, I think, and it didn't have the same effect. So I think corn's gone up, soy hasn't, sugar hasn't gone up, but wheat has gone up.
00:51:29
Speaker
All of these have the underlying sort of like um fertilizer story, which is again related to the Hormuz story. They all have, there's there's no fertilizer coming across the strait.
00:51:41
Speaker
Wheat additionally has had a bad season in winter. They've had a drought now. And only 30% of the current produce is of good quality. The rest 70% is medium to poor quality.
00:51:55
Speaker
um and And again, this will not show up on our shelves right now. This will show up on our shelves in like three months time or four months time by autumn or by December. Yeah.
00:52:08
Speaker
um the The only way that I can see all of this affecting the US stock market is like a very whirlwind where it's like holding my ear like this. It's very tricky. So if if you if you'd bear with me, um Japan is 90% oil exporter. They have the risk. Importer. Importer.
00:52:33
Speaker
So they're 90% importer. They do have reserves, not so much as the other countries. The issue is the majority of our reserves are in Europe and America. and all of the demand is in um Southeast Asia and Japan. Japan has some reserves, but not enough.
00:52:48
Speaker
um And if you see today, I think early just earlier this day, Japanese yen had its biggest move in a while, 2.1%. I think being a 90% importer, eating into the reserve, they're getting close to the point where they' going they go they're going they're going to have inflation.
00:53:07
Speaker
And if they have inflation, the question comes in, will there be demand destruction or not? um If there is demand destruction, that means you end up in stock inflation. If you don't have demand destruction, you end up in inflation. So the and and the the bank, the Ministry of Finance has to intervene to protect the the Japanese yen. So the buy yen, they sell dollars.
00:53:31
Speaker
um and ill i i would like I would really like to like recommend this book at the end. um the and the other healthcare I'll have to get it from a shelf.
00:53:42
Speaker
um But the large chunk of US stock market and global stock markets are propped by the scary trade. So they borrow yen and they sell dollar because yen is cheap. The interest rates were like zero, slightly negative, whereas they're positive elsewhere. But if, if, say it's not if, now the BOJ is going to, they've had some strong wordings today. They are, I think, I think, I think they're aiming for a neutral rate of 2%. They're far off from that. And as they raise rates, there's going to be this massive unwind. And then the stock market will come down. But that's if all of this happens, which I think, I think it does. But then with the market, God knows, honestly. Yeah. I feel like one thing that this ah event has really shown me, i think this is has been like the first macro event where I was like very tuned in into like all the different kinds of markets because before, I mean, I guess what was the last thing that happened?
Market Resilience and Economic Strategies
00:54:41
Speaker
Maybe like the Ukraine war or something. i I wasn't really like that into into all of the macro stuff yet or like had that this much of like an understanding.
00:54:49
Speaker
Not that do know, but like it's at least better than back then. But yeah.
00:54:55
Speaker
i was like I would have thought that the market would like respond a a lot more negatively than it has, but I guess like what you said at the beginning where it's like this consolidation where people had such a long time to position ah for the downside really prevented like further downside kind of which which is very interesting to see it's also like go back to like psychology and stuff a little bit where it's like you would you would think that this is like a world disrupting event and it kind of like destroys a lot of stuff but it's like if the positioning is already there then yeah the market won't actually reflect that it might even just like go up and short squeeze everyone and just say hey we're gonna make new all-time highs until until whenever and also i think um
00:55:41
Speaker
Macro-Doomerism is always like easy. like it's It's always easy to find bare cases for for like why everything is like going going to shit. like the The world is ending and and everything is... Nothing is really stable, the currency doesn't make sense in the long run, everyone is like in lots of debt, we don't know how to deal with that, the population is collapsing and everything. But the market is still going up. you know like and and yeah it's it's like doing that like When I first like learned about all of this stuff five years ago or something, I was like, oh shit, this is like really bad. This is why we need Bitcoin. This is why we like need need all of these things. And it has played out to a certain degree in gold and stuff like that. but
00:56:24
Speaker
in the real world, in the real economy, in the markets itself, nothing has really changed to a huge degree. The market is still going up. It's still the best place to put your money mostly.
00:56:35
Speaker
Gold is a little bit more expensive, but like inflation has has gone up, like stuff is a bit more expensive, but life is mostly the same. So it's like, when when is this going to happen? Are you really going to be like the Michael Burry person where it's like, hey, I'm going to short all of this now and then this is going to be like the huge crash? Because it will happen like eventually. It's it's it's it's like preordained that this is going to happen. But the system itself also has like such a huge huge incentive to like not let it happen in like this way where the Fed is always going to backstop it because the whole economy is dependent on the stock market and we need to keep it up to like keep all of the the the pensions safe and and the the taxes that they collect from that.
00:57:17
Speaker
and then all of the other sectors of the world also kind of like have this incentive to keep it up because it's like in everyone's interest that this is like still working. So even if there's someone like Trump that is like,
00:57:29
Speaker
acting against world interests by just starting a random war that has like no real point and no no like victory condition and even if they like i think the biggest problem of the war is probably that there's like no leadership in iran to even make peace with at this point like there's probably like no this is why the communication is so so bad because there's just like different fractions and they're warring for power and we kind of have to wait until someone wins and then maybe negotiate with them or or whatever but yeah as long as that is still happening and then Everyone still wants to make money. as long as like people still make money somehow, it's going to keep going. And and it's like it it often pays more to to be bullish for no reason than to be bearish for logical, rational reasons.
00:58:14
Speaker
No, I agree. i agree. i think I think so, like Ryan, Flo Horse, my mentor, he said this one thing which I have taken to heart.
00:58:26
Speaker
And like now if, so I personally, the only time I'm trading ES is if I'm buying ES. not going to short ES. And say, at work, I've had people come up to me, like my colleagues, and they go like, we sometimes talk about trading.
00:58:43
Speaker
And they go, oh what what should I buy? And I say, just your paycheck, just take whatever you can, your savings, put it in the ES, just forget.
00:58:54
Speaker
It's just because i feel like even if you look at it from like a structural perspective, like companies who... perform well or lose their market cap or whatever they get taken out of the index and companies that do well come into the a it's it's literally rigged to like go up which is which is just the way things are ah feel like um on what we've discussed about macro the the it's it's it's not It is not a sexy trade, but I think the trade is like trading the first, second, and the third order effects because, as you said, Trump does walk it back. Things do you walk back, but it's always it always sets a new high. So like looking at the Brent or the wheat yeah or even even the tanker stocks, they sort of go up. Trump says war over. They come down. Something happens, they go up. People say war down. Something goes up.
00:59:47
Speaker
People say... So like i think it's it I think on the whole, they go up. But not not the ES, but like the second, third and trade order effect. I think that's that's where the alpha is up a minute, like these yeah these other other commodities. But yeah ES on the whole is a very safe bet um to sort of trade and take on.
01:00:11
Speaker
I feel like... the The only threat... So, um I would say another point is, as as we were talking earlier as to why yeah ES has gone up, apart apart from all of those, like, flow and positioning and book book things, I think if you think about it, a lot of these um companies, Nvidia, Microsoft, and such, that they they aren't really oil-dependent. They don't really need energy. Yes, the the data centers do, and that's a whole different thing. i think b having these data centers in the U.S., which is and and not as an energy exporter, really helps.
01:00:49
Speaker
So I feel like all of these are like sort of remote risks to the U.S. economy. The only real risk is there's this, like, ongoing chatter, which i i think I think after this post podcast, I probably need to dig a bit more into. think a lot of people are, like, oblivious to is is the private credit market because a lot of money is being raised in private credit with OpenAI, Claude, um all these deals happening behind closed doors. And there have been a few alarm bells about this. And I feel like if...
01:01:22
Speaker
If your Bank of Japan raises rates, you have some unwind in the trades across the Atlantic, and then inflation goes up in third or fourth quarter because of the oil closure, then the Federal Reserve is forced to, like, even though it's the completely inappropriate ex so instrument, raising rates is not going to help your so your supply issues. It's more is' more of a lever to control demand. But I think...
01:01:52
Speaker
They will be, and especially having like a newbie like Warsh who's going to, cop who who will be on there. i think that there's a risk of him messing about with the rates. And if the rates go up, that makes people want to pull money money out of risky, high equity, risky private equity, because you're getting better rates on the safe side with the Fed. So think that's the only sort of tail risk that I see.
Investment Strategies and Risk Management
01:02:16
Speaker
But I feel like as As it is with Bitcoin, if it's going up, you bet with the trend, you bet big and you bet strong and you keep your stops tight yeah until it all comes crashing down because I feel no matter how good of a trader you are, you can't really catch the reversal at the tip top. Yes, once it crashes, it will sort of have a relief bid. And then you can be like, oh, the market has shifted. People are you euphoric. And it's funny, like, because I have seen this like three or four times now on Bitcoin. People are like, oh, yeah, this is going to go to 100,000. And then the laser eyes come out and you're like, this is time to short this. Even though I love Bitcoin, this is time to short this. And I think the similar thing will happen. All of this, all of this right now is, I think, is setting up for complacency.
01:03:03
Speaker
Not sure when the sky will fall. I'm not looking to short the sky when it falls, but I will wait for the sky to fall and then I'll short into it. But I feel like over the course of our lives, next 30, 40, 50 years, I think buying ES makes sense.
01:03:21
Speaker
it makes sense Unless ah the US is going to collapse, in which case all of our lives are going to be like very different anyway. So yeahs it's probably a good good bet to make.
01:03:33
Speaker
think i want to I want to ask one more one more thing about... um I want to go a bit back into the trading aspect because i always find for very impressive that you...
Focused Trading on Major Cryptocurrencies
01:03:44
Speaker
like ah First of all, that you only really traded like Bitcoin and maybe Etherbit as well, but I haven't really like dealt that much into altcoins.
01:03:52
Speaker
um And you still managed to like make large returns with like very tight risk control and kind of like simple strategies, I guess. um And I wanted to ask if you have like advice for people that want to do the same thing like today. Is is it still possible? And also,
01:04:11
Speaker
um Because it's quite unusual that people like kind of just ignore altcoins and just like focus on one thing and like, can you still get these huge multiples by just like going for that strategy?
01:04:23
Speaker
Would do you recommend it? i think you can. i think, I think i think I think it definitely can. i think it's about having a structure though. And I think it's having a lot of patience, lot lot of, lot of patience because like, just so just just to framework my answer, the market, and as as your listeners and ah might know, the market like trends only 20 to 30% of the time. The rest 70 to 80 is just going sideways. And yes, you can need you need to know your regime and you can trade mean reversion in those 70% to 80%. But that mean reversion, is going to is it it is going to get you your monthly salary maybe a bit more. um It's not going to get you a new house or a new car. um
01:05:16
Speaker
so like knowing your regime knowing your strategy um does help to maintain it to get really big returns i think two key things are really important like risk management like and not risk management in the sense that oh i'm going to set my leverage lever to like 3x instead of 100x like i When men Bitcoin was going up, I think it was when it was going up from like 60,000 or something, I was 58 leverage, which did not mean anything because save if my account's like 100 pounds and I'm risking 1%, I'm risking 1 pounds if my
Leveraging Trading Strategies for Optimal Gains
01:05:57
Speaker
stops hit. I lose one pound. So like having a really good idea of your leverage and it's that, have you seen that movie where they interview this guy who's like a a drunk trader at his house. He's like, bet more, bet big. Yeah. yeah
01:06:14
Speaker
so I haven't seen the movie, but i know the clip. Yeah. So ah and ah that that guy is my inspiration. Not not his alcoholism. That guy is my inspiration. Yeah. Because like, I would say the big money that sort of so like why I feel comfortable leaving trading and like working somewhere else entirely was because like when I was making those trades, and there's still loads of opportunity. I wouldn't say it's only Bitcoin. I feel like there's loads of opportunity in the ES, in, say, stuff like Rivian, Intel, AMD, all of these stocks, there's loads of opportunity. It's about having a system, managing your risk, and hitting it big. When you get a winner, just hit it.
01:07:00
Speaker
Hit it big and hard. Like, don't, like, max lever and, like, blow out. But, like... some do To give an example to this abstract advice was when Bitcoin was trending up, I had like a trade on the one weekly time frame where I was like, okay, this is my one weekly time frame on a futures contract because i did not want to pay my funding. So, on the futures contract, this is my, going hold this until the end of contract expiry and then roll it over. But that was not just, that was just my base trade. And I would trade on the daily. This trade is going to go for a few weeks. The weekly trade is going to go for the month. So, try and capture the bulk of the the scenario. And I would come down to the four hourly and then put intraday trades on top of that.
01:07:48
Speaker
And then if and when possible, when the momentum's really strong, you can put on hourly trades, which go on for a few hours to a day. So ah and all of those trades had like different risk profiles. So i my weekly trade was 5% of my account. My daily was about, 2.5% to hourly was like...
01:08:10
Speaker
four hourly was two and hourly was one so was like risking eight percent of my account or something at the most if shit hit the fan everything just went to zero would lose probably like eight pounds out of my hundred pound of my account but my sort of RR was massive it was yeah I think about like 120 150 across those whole trade. And just sort of like closing that one hourly trade, closing that four hourly, closing that two daily trade, and then going back and waiting for that to like sort of form a range within that weekly trade and then setting those trades up again and just trying stack in as much as I can. You don't need to capture the whole, I did not need to capture the whole 100%. It's capturing 80%, 40%, and compounding those trades was, I think, the way, think, trend following.
01:09:01
Speaker
um Mean reversion works. It looks sexy. People like it. It's a big thing on Twitter. It feels good when you do it on the DOM. Like, you've you've nailed the top, and it comes back down. But the risk is high, and liquidity is thinner, um and you don't make as much. You make enough to sort of, like, you know, buy your groceries.
01:09:22
Speaker
Mm-hmm. <unk> like get your monthly expenses going. But unless unless you're like super fucking rich and those trades, but then you would be limited by your liquidity and execution size. And then you might need to trade in ES, but the competition is even more tougher.
01:09:41
Speaker
Sorry, that was like a very whirlwind way of answering that. No, I think i think that was actually very good advice. It was kind of like what what I was looking for. But yeah, I think this is ah this this has been a good conversation and this is a good point to to wrap it up. So thank you very much for coming on to the podcast. Thanks, Oku. Thanks for having me. That was a real pleasure.
01:10:03
Speaker
Thank you. Goodbye, everyone. Bye-bye.