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Insilico Terminal Podcast Episode 11 - Abetrade
95 Plays22 days ago
In this episode, Adam - known as Abetrade —-shares his path from early binary options scams to trading German bonds, Bitcoin, and derivatives across markets. He talks about evolving from short-term order-flow scalping to longer-term swing and volatility strategies, using options and ETFs to trade mean reversion and risk premiums. Adam also dives into his work as Head of Trading at Breakout, recently acquired by Kraken, explaining prop-firm mechanics and risk management. The conversation closes with reflections on burnout, lifestyle balance, and why building sustainable habits matters more than chasing constant action.
00:00 Intro, Adam’s background, first exposure to trading and ICO cycle in 2017
06:30 Trading German bonds, transitioning to crypto perps in 2020, early bull market experiences
14:41 Burnout, switching from intraday to higher-timeframe trading, learning patience
22:22 How he trades now - sentiment, options, mean reversion, and trend systems across markets
31:03 Selling options, volatility strategies, ETFs, and balancing different uncorrelated systems
42:45 Teaching new traders, reflections on markets changing, and why higher TFs make more sense now
46:22 Founding Breakout, getting acquired by Kraken, managing risk at scale
52:07 Why prop trading makes sense, risk frameworks, and thoughts on leverage for smaller traders
55:16 Staying motivated after success, daily habits, balance, and mental clarity
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Transcript
Introduction: Welcoming Adam (ApeTrade)
00:00:03
Speaker
you
00:00:14
Speaker
Welcome to another episode of the Insidico Terminal podcast. Today i have with me Adam, also known as ApeTrade.
Adam's Trading Journey Begins
00:00:26
Speaker
and I like asking people who they are to introduce themselves. so Who are you? What do you do? Thanks for having me. ah My name is Adam. ah yeah I go buy ApeTrade on Twitter. I've been trading for quite a while now.
Transition to Long-term Trading Strategies
00:00:48
Speaker
ah Around 2016-17 was when I initially started um and yeah i've been teaching
00:00:59
Speaker
you know, for a bit, they had a bunch of things. I'm, I think one of the few people that also trades, that's why quite a lot on CT, which no one really cares about. Uh, But yeah, I kind of started this, I started, you know, doing lot of like shorter term trading, day trading and stuff around that.
Initial Interest and Early Trading Experiences
00:01:22
Speaker
Then in the recent years, I switched more towards, you know, more boring, holding stuff for longer type of trading. But yeah, I've been, you know, doing this for a while, been through, guess can say, tried to trade everything.
00:01:41
Speaker
bunch different markets and different things you know something worked some things didn't but yeah it's been a fun journey to say at least what made you get into trading in the first place did you get into like all all trading at the same time or like crypto specifically or no and like i think around this like 2016 was doing something like completely different i don't have any kind of like background in you know finance or any kind of school to be fed And yeah, I think I was just like, you know, Googling this kind of like how to make money online with least effort. Yeah. And I kind of I think like the first thing that I ever traded were these like binary options, which is this there is this like
00:02:29
Speaker
um It was kind of viral video now on on Twitter. This is kind of a like mega eat everybody like. clear it is Yeah, yeah. So like the binary options was like the first like it's like a very similar concept when you just like battle, you know, longer shown and it expires like 30 seconds. I think it's actually like completely complete scam. And, you know, these websites were hosted in like some random island and you will never see. him money Anyway, but yeah, like this is kind of the I guess introduction that
Shift to Forex and Futures Trading
00:02:57
Speaker
I had. um And then, you know, around the same time I learned about crypto, it was like during 2017 when like the first kind of retail, you know, wave kind of came in. But like I didn't know, know, like anything. I think like when I bought Bitcoin for the first time, I think it was like 6K or something like that. But I had like no idea what I was doing.
00:03:27
Speaker
Yeah, both ETH and i started buying, you know, bunch of ICOs ah back in the Yeah. ah Yeah. Like made bunch of money. ah But I think like beginning 2018 and eighteen when stuff, Chris, I think I like lost all of it or most of it. um And yeah, I've been like very like during that time.
00:03:51
Speaker
ah I got, I guess, more interested in like trading itself rather than crypto. So, you know, and like back in the day, like there were, you know, like we had Bitmax basically for like perps and it was like super illiquid and you had these like insane VIX and everything. So I basically around that, around like 2018, gravitated more towards uh, like forex for very brief period of time. But then very shortly after i started trading futures, uh, where I got into, you know, or the flow and all of these, all of these things, which are like super popular now.
Trading European Markets
00:04:36
Speaker
Uh, and yeah, from like 2018 until i like
00:04:41
Speaker
to, to like basically until COVID or like 2020, I was trading, uh, the, the German bonds and, and Euro stocks, which is like, yeah, it's like the European version of like SMP and just bonds. But yeah, since I live in Europe, um, you know, these things straight in the morning. So, so yeah, i was saying that, uh, quite, and you know, I, I guess I got, you know,
00:05:10
Speaker
quite well, was doing pretty good um very quickly the time. It was like very different markets, even like the the order flow stuff and everything like it the the markets used to be like much thicker and were moving like much slower.
Learning Market Profile and Order Flow
00:05:26
Speaker
So like you could really like trade like dome and these things like in in bonds you know like i see like lot of people like trading or like posting you know dom on city on like altcoins which you know like move so fast and they are know like aggregated types of markets so this is like very different from what i used to do back then since these markets were like moving so slowly so you're just basically scalping few ticks um here and there and yeah it was i was doing pretty well and
00:05:59
Speaker
Um, around and there was also like not that many, um, like stuff online about it. I, I remember paying a bunch of money, back then, you know, there was a, there's an Axia Futures. They, I think they are still pretty popular now, uh, Jigsaw, which they also had like a order flow attack course, but, but yeah, there wasn't, there wasn't much stuff around and you know, why I started to be active on Twitter twitter as well. I think like.
00:06:28
Speaker
in 2019, you know, or around that time. But there were like no people, you know like who trades fucking German bonslides, like 70 year old Germans. So your strategy was basically like you were doing DOM, sculpting and all of that Yeah, yeah, yeah. these I was, yeah, I was doing, I was using a market profile and volume profile. I was using mostly volume volume profile and just kind of like trading around these like you know, classic volume profile levels, you know, low volume nodes, high volume nodes, that kind of thing. How does it work if you trade bonds? Like, do you just use such a ton of leverage because they are so... ah Yeah, yeah. So like futures ah compared to like crypto,
00:07:12
Speaker
uh they when you trade like futures on like cme or when you trade futures on like eurox you are not setting up the leverage but the leverage is like baked into the market like for example if you trade yeah es you know the esmp futures contract which you know it's it's trading at like six thousand seven hundred index points or whatever uh like one point is worth fifty dollars So okay your notional size is like a quick matter, like 200, 300 per trade.
00:07:45
Speaker
And your margin requirements are like very low. Like I'm not sure how much you need for like one year's contracts, but like it's like few grand basically. It's like the like the leverage.
00:07:57
Speaker
in ThreadFi and then like CME futures is
Trading Bitcoin in the Bull Market
00:08:00
Speaker
like often like 100, 200x basically just kind of baked into these contracts. So again, like yeah like ah the leverage is very high and it's the same in same in bonds like like the the the german the the german boom which is like the 10-year contract which is like the most kind of liquid thing which is traded in europe uh you know this this just moves you know like few ticks per day but like one thing is basically worth like uh like 10 euros so you know it's just yeah like the the leverage part is kind of there uh in the in the contract itself yeah i see yeah
00:08:36
Speaker
Yeah, so, so yeah, I guess I started to be more active on on Twitter, but you know, like I said, you know, there like non-existent kind of like community of people who trade these markets like so and I just started to post about, you know, more of the order flow stuff. and And I started blog as well around the time I figured it would be kind of cool to write about these things because it was also when kind of COVID started to hit.
00:09:03
Speaker
ah So I was just kind of stuck at home a anyway. ah And yeah, i kind i met
00:09:13
Speaker
He was like one of the first people I started talking to, you know, he used to trade back in the day instead of just schizoposting all day about fucking GPUs and stuff. Apparently he still trades, but he's just not really terrible about it anymore. Yeah, yeah. But yeah, I remember we had this like a, it was just like a small discord, you know, during the time where like just there's like, I don't know, like 10, 20 people and you were all like trading order flow. And this is where kind of started to look into into you know crypto trading more and basically started to trade BTC,
00:09:52
Speaker
um which which I then did for next like two years throughout basically the whole kind of like bull market.
Becoming a Full-time Trader
00:10:00
Speaker
You know, first on BitMEX and BitMEX kind of went went down.
00:10:04
Speaker
ah So yeah, I started, I guess I was sitting on Bybit. It was very... awesome and what What was the transition like from going to going from the boon to Bitcoin, which is like vastly different volatility, I guess? Yeah. Well, I mean, in 2020, like Bitcoin was very different from what I used to remember from like 2018 when, you know, you had these like insane candles and wigs. So it was...
00:10:33
Speaker
more liquid already and also it wasn't that hard like it's like bitcoin is very similar to especially like these days like similar to like nasdaq but like just like more volatile so there was definitely a kind of a difference but but yeah it's just it's just like it's a faster market uh so you need to kind of pay little bit more attention but i remember like back in, you know like when, like the early 2021, which was like when I was like fully in trading BTC, it was like one of the easiest conditions you could get ah because like price was just going up and you basically had,
00:11:17
Speaker
You know, like back in the day, like there was really very little order flow kind of fragmentation. Like yeah all the retards that were trading on Bitmax went to trade on Bybit mostly. Yeah. So you were like just watching, you know, what Bybit is doing and you had these like very aggressive shorts into any kind of small pullback and you were just kind of buying into it, buying into it, you know, price went up. So, so yeah, it was very, very easy very easy times and very easy conditions to trade, trade BTC back then.
00:11:46
Speaker
uh yeah how long did it yeah did it take you to like were you when did you go full time with trading were you like instantly profitable so you just made it your your main thing or did you do anything on the side i i went really really full time around that time when i kind of were transitioning and and I was doing some things on the side as well. And I like did some, some things which were like not related to to crypto. ah So, so yeah, I, I basically was kind of like moving more and more towards going full time too. And I think by the end of like, or like half of 2021, I was kind of like, yeah, like this is kind of you know, money to go full time.
00:12:34
Speaker
Yeah.
00:12:37
Speaker
How was the transition? like what what What changed for you when you when you went all in? Did you have like ah a certain number that you hit and you were like certain that you can survive from trading from that point on?
00:12:48
Speaker
Yeah, I guess like crypto going up only was helpful in that because it was very easy to to make money, you know. and And, you know, I came to and i came to crypto like like I fumbled so many things, you know, like when I basically like I started trading crypto very heavily um towards like end 2020, you know, like after the COVID recovery basically and 2021. But it was like very new thing to me.
00:13:16
Speaker
ah So, you know, and there were like, you had like DeFi summer, you know, after that you had a, I remember buying BNB at like $10 and selling it at like 15 thinking, you know, how smart I am. So yeah, like i you know, there was like many generational about wealth. fumbles uh but but still like you know it was kind of like price was going up um you know i was mostly trading bitcoin um it was like very very easy to trade trading today so so there's a like very profitable year uh overall basically for like trading and made this kind of transition too uh much easier yeah um yeah no go on go on
00:14:04
Speaker
Yeah, no no, but I think that' that's basically kind of it. Yeah, like I did this, I did that for like until end of 2022, I think, which was like, you know, like November was basically when when price stopped. ah I was like, yeah.
00:14:23
Speaker
sorry yeah um no like i mean end of 2021 uh oh i was i was doing it so like when the price stopped in like november um but yeah after that it's it's been like almost two years and i was like you know sitting at home 15 hours a day living life shit like shit, like shit.
00:14:46
Speaker
So yeah, like money wise, it was all fun. But yeah, I was like, down bad looking like I'm about to die in a minute. So so yeah, really. that like Yeah.
00:14:57
Speaker
So so yeah after after that, like I kind of reconsidered and and started to ah explore, you know, more of like a longer term holding stuff instead of just you know sitting in front of a screen for 15, 18 hours each day and slowly kind of gravitated towards that to you know what I trade these days basically.
00:15:23
Speaker
Was that difficult for you to transition from a lower timeframe mindset to a high timeframe one? Yeah. yeah like
Exploring Trading Strategies: Trend and Options
00:15:30
Speaker
like the Like the first year oh I wasn't like almost able to make any money basically.
00:15:37
Speaker
um and it wasn't like because of you know everything went down i was always kind just know taking long shorts I didn't really get it that much ah but yeah like definitely definitely going from you know, having this kind of like a full control of like we take a trade and you just look at it. Basically something happens. You just, you know, close it. Once you are done for the day, you just fucking leave and do something else. Don't have to think about it to just like have, you know, a bunch of positions open, you know, overnight, uh, not kind of shitting your pants on, on like a, you know, two day pullback type situation. Yeah. Yeah. It was like very difficult. It was like more difficult than,
00:16:21
Speaker
I thought it would be and went like very slowly from like from just know interday trading to more of this like interweek where you know like you hold trades like two or three days still using like very similar concepts of you know just like order flow and but looking at like bigger you know like liquidation spikes and stuff like that ah and then to you know what I trade these days which is like i hold trays for you know days weeks sometimes months so so yeah but but the transition was like very difficult and i was like having a lot of these like you know moments where i was like fuck like i am unable to make money um i need to you know go back to do
00:17:07
Speaker
day training or like go back to do this thing, which I, you know, did for the last, you know, four to five years and I was pretty good at it. Uh, but then, you know, kind of once again, coming back to the point that I don't want to, you know, do it, sit in front of things for all day for the next, you know, whatever long. So, so yeah, but yeah, it was like super, super difficult.
00:17:29
Speaker
Yeah, can relate to that because I also mostly trade like lower timeframes. So that's what I've been doing for like a long time. And I've like recently started to do more higher time frame stuff. And it's just very it just feels a bit unnatural to like hold things for for so long. you know It's just like, yeah I want to take the quick profits and not just like leave it there and then it zigzags up and down and P&L switches and whatever. And I just want to close it. but like sometimes it can be beneficial to hold for a long while, but it's just, it's a different mindset. Yeah, for sure. And I think like one of the things which I like struggled a lot with was like, you know, like when you use the other flow and you look at, you know, like Dom and you use these like footprint charts and whatever, like you think you are fucking like smartest person in the world and you know exactly what's going on. And I was, I had this like thing in mind where like day trading and like use, like doing these things is like the only way how you can,
00:18:25
Speaker
like predict market, you know, like like it's like I was, you know, like I what I struggled with for a very long time was like really convincing myself that like i cannot Like, how the fuck am I supposed to know what's going to happen? Like, what the price is going to be in like, yeah, fucking two weeks or something like that. Right. So it's it's much overall. And I still feel like this is this is true.
00:18:48
Speaker
Is it like it's easier to, you know, like what's going to happen in the next hour rather than, you know, where the price is going to be fucking next month. But yeah, I agree. ah and i And I still don't know that, but I think one of the kind of like a realization is that like I am like you are able to make money holding things for longer periods of time without knowing where the price is basically going to be in the next month. So yeah.
00:19:17
Speaker
But yeah, it it was very it was very tough. Like there was like lot of of back and forth, and lot of money lost. stuff yeah It's kind of funny because I really get what you mean, but I feel like on CT, their opinion is kind of unpopular because like most people don't really trade lower timeframes and yeah everyone kind of pretends that they can know where stuff is going in weeks or months or whatever. Like it's almost the main way that people trade or at least what they post a lot and stuff. Yeah, no, yeah it's fun. Obviously, like these things, like you you look some of these like
00:19:50
Speaker
main main characters you know like people calling for like you know 50% moves and in whatever like but like that's like absolutely what is like so unnecessary to do even if you hold these trades for like long It's, it's, you know, like I, when I take a trade, you know, these days and, and I, it's like a directional swing trade because I trade also like non-directional stuff in options and stuff like that. But, uh, but like when I take a directional swing trade, like I have no idea where, know, like I, I, I'm kind of hoping that it's going to go by direction, obviously. So I'm not going lose money, but like, I have no idea where or how far is price going eventually basically so yeah it's it's it's very funny it's like the city overall is like funny place and a lot of these like big predictions are pointless and yeah people people are uh yeah doing a lot unnecessary stuff it just it just looks very very cool in hindsight when you can post like a pnl screenshot of naming the pico pico top or pico bottom or whatever but like the execution during that time like you don't really like no one really knows what what is going to happen in six months or whatever like anything can happen in that time yeah of course you can still make money from it but like
00:21:14
Speaker
Yeah. The conviction that people display is a bit misrepresented sometimes. Yeah. And it's like, you know, like it's because I feel like, and like, I don't think like, like technical analysis and all these things are like useless in a way, but like, you cannot be serious, you know, like drawing a support and pointing a big arrow towards it. And like, yeah, this is, a a this is, this is the fucking level where, you know, price is going to go for uptrend for the next four months from it because you know it was tested before as support uh so yeah well we're talking about that you have quite a lot of uh educational stuff i've also read a lot of it back back in like a couple of years ago it's really good i like it and um so you're familiar with a lot of different tools so i was wondering what are like your your favorites nowadays that you're that you use like your favorite
00:22:09
Speaker
orderly Yeah, yeah, yeah. ah Like I said, like I used to, you know, and I haven't been really posting that much on ah on the blog these days. I think I do like one post a year. But but yeah, like back in the day you know, like I said, I there was like very little stuff online about, you know, things like market profile and like footprint charts and all the flow and stuff like that. um I don't really use it anymore at all. You know, I think that these things are kind of pointless to use on like higher time frame. Like when when we are talking about like charts, like I don't and I don't really use also like, you know, like do that much technical analysis as well.
00:22:54
Speaker
But like i don't really look below like a daily time frame. So yeah, it's it's a lot of the things that I have on my blog and i I always get these like DMs and messages about some like interday style like yeah I'm washed. I don't really look at these things anymore. But yeah, um but yeah like like i said, i i trade a bunch of things these days ah across, you know, both kind trade fine crypto. um I also trade options a lot in ThreadFi mostly, but but they for like a directional trades, i'm I'm trading like very simple like trend following and mean reversion things using just kind of combination of of like bunch of indicators that like you know for like trends and i you spoke with uh scott uh in yeah prior episode and i i i think he has like a bunch of good threats about you know like trend following stuff um and stuff like that so yeah i i'm just like using very simple
00:23:59
Speaker
simple tools, but for each market that I trade, I also have like different kind of indicators, which what I found the most success in ah were kind of these like tools and indicators, which are looking at like positioning of overall market.
00:24:21
Speaker
um so So for crypto, for example, you know, I look at a lot of these like options skew, which is basically, you know, how kind of cheap or expensive options are on like the call side, which can kind of tell you if what the sentiment of the market is. I still use things like open interest. I still use things like funding rates, but looking at from it more on like a Um, like more of like a comparative basis where really looking at these points, but like in the last, you know, X amount of days, how high is it relative the open interest to, you know, where it was before, ah
00:25:02
Speaker
also kind of with funding rates and with liquidation. There's like there's like a lot of nuance to it because, you know, like it's very different markets. Of course, like Bitcoin is is much more mature than than altcoins, for example. um But yeah, I'm kind of trying to like for for each market I'm using and there are some some of these tools, obviously not the same, but like some of these tools, some of the indicators that kind of give you idea of of the of the sentiment existing futures, ah you know, same we can look at, you know, there are options on futures, for example, on CME. So like I can also look at these kind of like ah at the skew of the options. I can do the same in stocks. um
00:25:47
Speaker
And yeah once I kind of get the idea of the where the you know, like ah to eat what side the market is kind of stretch and like i usually try to just kind of to go against like the bigger sentiment when like when like the sentiment is very, very ah stretched, then i just have like a very simple um execution for like, you know, either looking for like mean, mean reversion trades where things are like super stretched or we usually what is like easier and often less painful is just kind of like waiting for markets starting to, you know, turn ah and then just go with like a trend, you know, momentum type of kind of entry where, you know, it's it's already the kind of established trend and you just kind of try to write that and you know eventually get out hopefully for to make some money do you feel like options have a lot of influence in crypto or in bitcoin
00:26:46
Speaker
Oh, I would say for sure, like in Bitcoin, i would say for sure ah for in Bitcoin and ETH. ah in In other markets, not really. I think it's kind of interesting. And probably i was I remember like back in 2021, 22, I really felt
00:27:07
Speaker
ah i don felt like there was, you know, like options of us like in in stocks, like you have Robinhood and it's like the main DGEN thing in the US markets.
Volatility and Options Trading Strategies
00:27:21
Speaker
And it never really came to crypto in this way.
00:27:24
Speaker
and I felt like, you know, like a couple of years ago i I was really thinking and it like that like that's kind of like the thing which is kind of like not in there and like could be there, you know, like options on altcoins and i'm playing these like zero DTs and stuff like that.
00:27:40
Speaker
but it never, you know, never really caught up. So, ah so yeah, ah for BTC and ETH for sure, you know, there a bit, there is doing a lot of volume um and there are some other other places for options trading, but but they are outside outside of these two, it never really kind of caught up. I don't know why. it's like,
00:28:09
Speaker
too complicated for people it's a what why is the influence so present because i feel like compared to perps volume options volume is quite low and in tradfi options volume is like most of the the derivatives yeah yeah well like in i think the the thing is like you don't really have like burps for stocks um in trade five so like there are and i think there were some attempts or maybe some like brokers have like futures for stocks, but it's it's not really a thing in Threadfire. So like you have just like, you know, like if you want to trade like Tesla, for example, on Robinhood or Tasty Trading Direct Brokers or whatever you are using, you basically can buy a spot
00:28:55
Speaker
you can short short the spot as well but you only get like 2x leverage oh and it's you know like so you need to put a lot of margin it's kind of pain in the ass because like you pay to be short do the stock as well and then you have options where you can you know like the leverage is almost fucking infinite so so there is I think it's just in in thread 5 it's more like there's no other option really than trade options if you really want to like max out the leverage yeah
00:29:25
Speaker
But in crypto, the volume is comparatively quite small to perps, no? So um what why is there still a huge influence or an influence at all in in your opinion?
00:29:35
Speaker
I think for BTC, the volume is quite big on derivatives at least. I think it's definitely, and and like you can do a lot of stuff in options as well.
00:29:48
Speaker
really is itdo it's like it's It's definitely more complex than trading perhaps, but it it gives you, you know, really options to do a lot of things you yeah like want to express, you know, in very different ways and you can like structure the trades many different ways you want. And so, yeah, I think it's and like in In ThreadFi, like in s SPX, for example, like options are mostly used for hedging.
00:30:22
Speaker
ah So because once again, like people buy like if, if you know, like when S&P is trading, you know, whatever price today, like people and people want to hedge, they don't buy the options like put options at the price where SPX is now, but they they will basically like do you have an option to just buy at like a lower strike.
00:30:48
Speaker
So when market starts to drop, you know, you start to make money and these options are cheaper compared to the ones that are. there Yeah. Like like i said, there's like a lot of, lot of different ways how you can, how you can kind of express your opinions. And I think there's like a lot of,
00:31:05
Speaker
larger traders in crypto who rather trade options than perps. you You said you're doing some delta neutral stuff using options, right? Yeah, yeah, yeah. So that's to be fair, like the mostly like 80, 90% of my trades is actually selling options.
00:31:25
Speaker
um So yeah, i am ah I got quite a lot into image just like volatility trading. um How does that work?
00:31:37
Speaker
ah Yeah. So you basically you basically sell um sell the options instead of buying them. So, you know, like, for example, and I had a trade in iBit, which is, you know, Bitcoin ETF a couple of weeks ago, where basically after the October 10th, what I did, i i sold a strangle, which is, you know, you sell basically put in calls, which are like not at the current price, but slightly after and you are kind of betting on the fact that price is basically just going to stay the same. Like it's it's not going to move much. Right. So like you can like if you think and especially after these like volatility events and you know, there's like there's one kind of interesting ones in Bitcoin and in these ETFs.
00:32:30
Speaker
You have ah in options, you have like implied volatility, which is like what market thinks the volatility is going to be. And then you have like a middleized volatility, which is like actually what it's like, ah you know, like implied volatility is like forward looking and the realized volatility is, you know, what has happened in last, you know, whatever days. and in crypto and in these ETFs especially the implied volatility very often almost always is higher than they realized because you know like when btc moves it moves a lot so you know it it makes and you know like lot of people like especially like you know when people on like Robinhood and stuff like that like they
00:33:12
Speaker
want to buy options, but because you know, you have this like implied volatility day and obviously like options have expiration date. So like it's it's not like a per position. Like if I buy a call,
00:33:25
Speaker
and longer perp at the same time and price just like slightly moves higher. Like in the perp position, I'm already in profit because it's above my entry. But for you have to pay for the option. So like if like there is a certain way of price needs that needs to move for you to even start to make money basically in in options. So yeah, more often than not, selling them is actually kind of a smarter thing to do because you um just collect the premium and you know, these options basically decay. So yeah when price is not moving and yeah, for for Bitcoin and for the, you know, Ibit,
00:34:03
Speaker
ETF, ah the implied volatility is very often higher. So like we market kind of things that price is going to move more than it usually does. So, so we have one of the things which I, one of the things that I often take and in ETFs, especially is is just selling selling these like straddles and strangles which are these kind of like neutral structures basically betting on price to but remain the same. Isn't that still some kind of directionality?
00:34:33
Speaker
Like you you're not be betting on the directionality of price but like on the direction of the volatility? Uh, yeah, but like when the, like, we usually, you know, like usually when you sell structure like this, like you are betting on the fact that like volatility is going to, you know, be lower because like, yeah because like the volatility and price often kind of go hand in hand. So like if price moves a lot.
00:34:59
Speaker
and you are short of these structures, you obviously lose money on world as well because like, you know, price moved. So market was volatile. So, yeah, it's it's.
00:35:09
Speaker
ah And yeah, like you, I take bunch of these trades, you can then, you know, like obviously uh it's very different kind of like payout curves compared to like directional trading where these mostly you know you often make a little bit of money and every once in a while you kind of get fucked because market moves a lot and you know as you start to lose a lot of money so it's definitely not a not a free trade, ah but yeah, you can hedge these. Obviously you can then like if you sell options closer to the price, then you can like buy some very cheap, you know, like five Delta one to five Delta options. twice here So like you're not going get completely kind of rolled over, but like a lot like this there is like a lot of lot of great stuff about this from from you and Sinclair. He's, you know, very kind of known in the world of trading space and he talks about this ah concept of like risk premium where
00:36:13
Speaker
like selling options and like doing these type of things is more like a selling insurance where you, you know, make money most of the time, but every once in a while, you know, someone dies and you have to pay their family a lot of money. So it's a very similar concept to this. And this kind of way, it's this this this thing called, you know, like variance risk premium, which is this kind of like very persistent trend of implied volatility,
00:36:42
Speaker
It's overstated basically compared to what what markets usually do. It it kind of happens in in bunch of different ways. So yeah, like like i said, I did a lot of these ETFs because like ETFs have, you know, kind of less this like idiosyncratic risk for like for like, you know, like for stocks, like some you know news is going to come out or like there you always have earnings as well. ah You know, in for bitcoin is i think like there's very few things which like very few news moving BTC at this point. It's like, you know, like what is the narrative?
00:37:22
Speaker
I don't know, like everything happened at this point. So I have a hard time imagining like what would Yeah. yeah So like for ETFs, you know, I do a bunch of these trades, but yeah there is like a lot of lot of things and but it's very interesting. um It's very interesting stuff to trade. But but the the kind of the concept overall is is very similar. Like I said, I sell options more than I buy them, you know, in these ETFs, which is like You hold these trades for like a month
Diversifying Strategies Across Markets
00:37:53
Speaker
basically. You you generally but sell like 30 days to expiration so like these trades can take quite quite a while. i do a lot of earnings trades as well in the in the stocks earnings ah which is basically the same concept. It's just the the fact that you know when
00:38:13
Speaker
stocks have earnings the implied volatility is much higher than they realize and usually more often than not uh you know people are just expecting these huge moves uh but they tend to not happen that often yeah uh but yeah the the the payout curve for a trade like this which obviously just takes one day because you know you just buy the nearest kind of expiration compared to some of these things which you hold for longer is very similar. Like, like if you just like collect this type of like insurance payments, but obviously, you know, then you sell, sell one of these structures in like, you know, Nvidia and then we get moves 30% on earnings. You get like, um, every once in a while. so so it's, it's a very, it's a very different type of trading, but I, uh,
00:39:06
Speaker
I think at the moment i'm I'm trading around like six or seven strategies, which are, you know, some of them are like directional, some of them are in the options space. So I try to these days look at the things as like, you know, just trying to have like a bunch of uncorrelated strategies in like different markets, you know, manage the risk.
00:39:27
Speaker
Obviously all of these strategies I think is like very important. for all of the stuff that you trade and whatever it is just like one thing or a bunch of things like have some like you need to be able to explain what are you doing to someone who like understands a little bit of market and and they should like be like oh yeah it makes sense like this thing is going to you know make money i like for for like the for like a directional stuff you know it's just like trends usually last when they happen right so like it's like when you for example when i compare the
00:40:01
Speaker
you know, like the option selling stuff where you make small amounts of money mostly, but then every once in a while you get basically rolled over. ah Compare this to like momentum in stocks or like momentum, even in crypto trade.
00:40:16
Speaker
Usually, you know, you bet on a trend it often doesn't happen you know you just get stopped and you know you just make a little bit of money lose a little bit of money um but then you know every once in a while you will get this big move yeah and you will make much the other way yeah yeah so so it's basically like other way around in in like payout curves so i i kind of try to combine these things together and then they together create this like a strategies where or there's like one bigger system where you know hopefully something is going to make money uh that sounds like it makes it psychologically also a bit easier because you're like uh relying on multiple different things and yeah yeah like if you're only doing momentum and most of the time you're just like losing yeah yeah i feel like that can get quite hard psychologically yeah for sure and um yeah and i was like looking at you know when i was kind of moving towards this and um you know thinking about swing trading and like how
00:41:16
Speaker
how I want to run things like this. You know, especially in crypto, like you have you have like a lot of things you can do, ah but it's just like it's very often done by very smart people, you know, and I'm sure like Scott maybe talked about it like they do lot of these like carry strategies when like, you know, like you you short in one per day, you you know buy another one or like that is like inefficiencies where there was like I saw <unk> tweet a bunch a couple of days ago for from
00:41:48
Speaker
ah from Ponzi Trader, like he made a bunch of money because there was like mispricing on Kraken and ah some decks on like some token that launched like like there is like so many things you can do, but they usually don't last or like the edge is kind of like people are really, know, like it's like so many people, for example, running these like funding strategies nowadays or just like look at for these like different mispricings. It's like very, very competitive.
00:42:19
Speaker
Yeah. That was situation. And umm I don't like to think that I'm smarter than I actually So really try to just like do things that have like a long historical, you know, evidence that they are working.
00:42:34
Speaker
And like I said, you know, I don't really do interday stuff anymore. I don't really, know, look at lower timeframe charts. I don't, you know, like when I take a trade, um and it's like these earning trades, you know, they they are quick, but every every single other strategy that I trade is he whole is holding trades for you know days to weeks. so if you If you had to start over, or teach someone that is like new to trading, would you do what you're doing right now or what do you recommend to go back to lower time? Yeah, it's it's hard because like
00:43:10
Speaker
like i I would say that I feel like I feel more, way more confident in the stuff that I do compared to like what I used to do on like over time frames. And I think like, I saw tweet from, uh, from Salsa a couple of days or weeks ago, where he mentioned like how like intraday Bitcoin has changed over the years and how he like lost his hedge. Yeah, yeah, like how he like lost his hedge, which, you know, makes complete sense because like you have all these new instruments and, you know, it's very different market than it was, you know, five years ago basically. So, um,
00:43:53
Speaker
So from this point of view, like I really think that what the stuff that I do now, i I think it's much easier to, do you know, and to teach people and um they have much higher chance to, you know, make money. But obviously the issue here is that, you know, like running multiple strategies and even if you would do like momentum or like a meaner version, like simple stuff in a bunch of these markets, like you don't trade very often.
00:44:24
Speaker
Obviously these things like not going to make money every month as well. So you need like a lot of money to you need like a big account basically to yeah because like you are trading you are not trading very frequently um and yeah and you like you are allocating you know a bunch of money to different strategies. ah you need you have like, you know, margin requirements and stuff like that. So like, this is not something that you can relate any other people when they start with, you know couple thousand dollars, it's it's very hard to do. And even, you know, like even, even like bt if you would just trade like doing like trend following stuff on on Bitcoin, for example, like how much money you can realistically make like bitcoin has these like very sharp moves and then it goes sideways basically for months and then you know has another move less like even if you call you know all of these big trends like if you have small account it's very hard uh to do and and being able to you know sit on your hands when
00:45:32
Speaker
the kind of like because obviously it's stupid to just like go fucking all in. ah But then, you know, like you are focusing on these like bigger moves, holding holding days for longer.
00:45:43
Speaker
But then you are, you know, like you're sitting in a trade and you just the PNL is almost like meaningless ah because the account is smaller. So I'm very glad that I did it the way that I did it, that I started day trading. I think I learned a lot about like markets and market microstructure and like how markets work and all
Advice on Strategy and Prop Trading
00:46:03
Speaker
of that stuff. So I'm very glad I did. was very lucky.
00:46:07
Speaker
that I also made bunch of money ah early on, you know, when ah especially when the markets were easy and, you know, in the trading basically. But yeah, so this is a very tough thing to to say because because, yeah, you you just need to have basically higher capital to yeah to do the stuff that I am doing these days. And ah yeah.
00:46:32
Speaker
You need to be a bit more of a degenerate with a smaller call. Yeah, for sure, for sure. yeah I want to talk a bit about Breakout because yeah ah recently it has been sold to Kraken, right? Yeah, yeah. And you started it with Kred?
00:46:49
Speaker
Yes, with Kred and Main. was like a very good timing because in, i think, 20... 23, uh, is when we start. Yeah, we started. Uh, yeah. Yeah.
00:47:05
Speaker
yeah Well, I mean, i used to, I used to live in, I just live in Spain and I just moved back to hometown where I live now. I was like, dude, what the fuck am I going to do? was kind of like, and this was like when I was in this transition to just like swing trading and all of these things that I do now, which they require a lot of work
00:47:34
Speaker
things all day. So was like, I would really want to do something ah else, like work on some things would be pretty cool to to just kind of like occupy the mind a little bit. And yeah, basically, Kred, yeah, Kred reached out to me about it, that they are starting this thing. and And yeah, so I was like, yeah, I'm down.
Role at Breakout and Kraken
00:47:58
Speaker
And I joined right at the beginning. And I'm basically working as as a head of trading in in breakout. So like my day to day is also quite busy these days and I'm like doing stuff like managing risk and and things around that basically. what What does head of trading mean in that context? Like what do you do?
00:48:19
Speaker
Yeah, i'm I'm managing the risk. We are... are We are booking lot of traders so it means that you know that all all these traders that get funded the the money that flow is sent to exchanges so they are trading on actual exchange and there is like a lot of work which basically evolves around you know monitoring the accounts of making sure everything is working as intended you know on the on the platform that we are using and and that everyone is you know trading as they they supposed to and stuff around that basically so all of these like trading operations um yeah
00:49:00
Speaker
Because I think many prop firms do it in a way where it's like people that trade don't actually, like they have like demo accounts kind of yeah, yeah. Where actually execute the yeah stuff but they get like paid out. Yeah, that's usually the the kind of the way how how it's how it works is that there's just people, you know always trade on the demo account, they get paid from, you know, other people and some other sources. But yeah, since we were, and they had really this idea ah to do this in crypto, which I think breakout is really the first kind of like there's there are there are more of them now, but but yeah, I think we were kind of the first thing too yeah ah first firm to do do it in crypto. And, you know, like lot of these pro firms, they are um in like CFD and Forex space ah where
00:49:56
Speaker
um you ah these markets are basically traded OTC. So like the people like when you trade, like when you trade CFDs, which which are these like European contracts for difference, just like the thing, it's like big thing here in Europe or just spot forex. It's just like traded with like one liquidity to provider is that just like takes all the data and like you cannot really do things like we do where we can like connect to the exchange, you know, via the API and just send send the flow in like a very clear and visible way basically where we like
00:50:32
Speaker
you know, have like a master account on the exchange and where we like see all the trades and everything. So yeah, so so yeah, there's like a big difference from from this ah compared to these like forex firms, which are still, I think, more popular.
00:50:47
Speaker
So yeah, it's been a very fun experience and yeah, recently we got acquired by AccraCAD. is is the flow like sent to kraken now so you basically trade on kraken if you use it uh we are using uh okx at the moment mostly yeah but we are kind of working with kraken and and and you know trying to figure out um all different uh ways how we can can do it because like you know these days it's it's quite a lot of volume as well so we are always kind of like uh thinking about you know where people can get the best execution in the first place you know yeah yeah
00:51:34
Speaker
Did what what changed or did anything change in your role now that you got acquired or you're just like doing business? assessment Not really. I would say that like that I think like there is a lot of like marketing joint marketing stuff from like Kraken and Breakout, but ah From like operations point of view, we are still very kind of independent and you know, like I work with like a very tight team on all of these trading
Benefits of Prop Trading
00:52:03
Speaker
operations. So not really for me.
00:52:05
Speaker
ah Yeah, not really for me that much.
00:52:10
Speaker
Why do you feel like ah a a prop trading account makes sense if if you're starting out as a trader to give you a chance to do some some marketing maybe? yeah Yeah, I mean, it's a it's a definitely a way like I, you know, like I can start trading before. This was like a huge trend and I had I kind of had ah money already to not really seek out these. But yeah, I think it's it's a good thing to for people to you know get get access to capital when obviously like you you need to look at it from the way that like how much you are paying for the account. It's basically it's like a risk, almost like a risk for trade type of situation where like you don't need to view these
00:53:01
Speaker
these things is like, what is your risk compared to what you can basically gain if you manage to manage to meet all the rules and basically eventually get funded. And there's like a lot of people who make like really good money doing it. And I think like a lot of all of them have this like approach to it. It's just like access to more leverage for your money because like And, you know, there's like there are there are like, you know, edge cases where like we had these big sell offs, you know, in BTC a you know month ago and today also doesn't look very good. But and like, you know, like in these situations, like people lose fucking everything like, you know, ah you see like six figure loss, which is like a retarded, you know, someone wiping account on like one bad day. Yeah. ah
00:53:48
Speaker
But like you can also kind of view the prop trading in this way. Like like you are never going to lose more of the money than you put in for like buying this account. So I think it's like very good, very good thing to do if if you really want to get leverage. Obviously it gets like a little bit of better your reputation because you know some of these firms are a bit shady and they, you know, like don't pay off people and shit
Balancing Trading with Lifestyle
00:54:15
Speaker
like that. But, but yeah, I would say that like, it's very important, you know, what you're doing in the first place, which should be kind of like an obvious thing, even for like trading overall. It's just like, you need to know what you are going to do and not you go for like teaching gambling the things because that's that's, you know, never turns out to be
00:54:38
Speaker
the best thing to do but like if if you have like a trading strategy if you have like approach you know test it on the you know like smaller account live account whatever and like you are not just going to fucking buy one account after the other and keep failing it and you just view it as kind of access to leverage i think it's a very good thing for for people to for people to do if if you know they want to trade with more fun basically yeah
00:55:07
Speaker
yeah that makes sense um i want to ask one more thing about how how your your lifestyle has changed now how you if you have any any advice since you went from trading full-time every single day in front of the pc to know more higher time frame stuff where you have more more other time if you have any words of advice to yeah yeah like like i said like i was like at One point dude like I was like just fuck like I was I was just like sitting at home, you know is drinking all day My my single hobby was just like what the bottle of whiskey I'm going to drink today But yeah, I was like looking like shit and and it was awful man So like one thing which which really made me that kind of you know, I was like persist in this in this switch is just like because i'm i'm kind of type of person like when I start to do something, I'm just like, you I don't mind sitting, you know, 16 hours in front of desk when I'm like going to do something and like needs to be done today. so so I can get very kind of stuck on things.
00:56:14
Speaker
um But it was like definitely a big big help to me to to kind of just like create space basically between between like trading and then just like focusing on on something else. And there like these days i i don't really i try to at least uh it's not really always the case but like i try to and know since being in europe like nothing really happens in in the morning anyway in the markets and overall so i usually i usually you know like try to be away from desk until like you know 12 1 p.m basically and in the morning just you know do like fucking sports and go to gym and go for a run or or something you know to just not being at the desk um it's like a big help you know like it's it's i don't want to to turn this into fucking like fitness coaching and and you know positive mindset podcast but but yeah i i i'm um'm very like you know against all of these things like
00:57:19
Speaker
whatever but but yeah it's definitely i can definitely kind of like feel like i feel much better and and i it also helps me kind of like think more clearly yeah when i'm doing other things you know like you go for a run and you just you know like we are running you know 10 15 kilometers and just like can have this like clear way of thinking about things and solutions rather than just sitting in front of PC and, you know, have a Twitter open on the one screen and then just being pissed at everything. So yeah, for sure. Like trying to create the
00:57:53
Speaker
and kind of the balance between and between these things because like I was like very burnout at like one point and and even it was a point like I had a like more money than I ever had before and I was like dude like what's you know like it's almost like no point because I just like feel like shit and it's just like yeah what what keeps you like motivated now that you that you have uh quote unquote made it or whatever I think I'm like not compatible to do anything else in life. No, like i ah like I think like working the breakout was very also very helpful to me because like know working with people and and, you know, just like
Passion for Trading and Continuous Learning
00:58:40
Speaker
focusing. it's It's still like trading related, but it's just like you get like very different point of view on trading and you just like have to solve different problems, you know, then you would do in your own trading.
00:58:52
Speaker
And the trading itself, like i still do, you know, do enjoy it. The fact that, you know, it's it's making money is definitely helpful. If I would be just, you know, losing money every month, I would probably not enjoy it so much, but.
00:59:06
Speaker
ah But yeah, it's it's just like there is like so much stuff you can like learn and there are like so many different things you can trade and like, you know, like you start to look into this one thing, you know, and like like with options, we've always spoke about options, for example, it's like I haven't been trading options for a long time.
00:59:26
Speaker
It's been just like, you know one or two years. ah And yeah, it just like started. Like, you know, like you start to just read about some basics and then you just go, you know, more and more deeper and deeper into it. And all of a sudden, you know, you're just like a few months in and then you have all these different strategies that you can trade and and test and stuff like that. So, yeah, I still just genuinely enjoy.
00:59:51
Speaker
ah trading and just doing these things. And well um yeah. And especially since I kind of like I know that like when I leave for a week and just do nothing for a week, like I'm not going to probably like miss something like huge, huge. Obviously, like downside for for these things, especially like when you trade like directional stuff like you know you miss the trade you're fucked like you get this like one day you know like when the when the signal happens you know like you had like last year you know like when trump won the election right like you have like a day to get long and yeah usually like even in april you know this year uh there's like a very
01:00:34
Speaker
short window. So to be fair, like I would say that like if maybe like even if you if you are day trading, like that's probably like more flexible in the sense like you can just, you know like fuck off for a week and like you are not going to miss anything for for this hard time approach. It's little a bit more complicated, but also at the same time, you know, like when I used to, when I used to day trade, uh, like I couldn't do it anywhere other than from my home.
01:01:01
Speaker
You know, you always see these fucking people trading on phones. or like yeah like in in front Yeah. Yeah. Yeah. yeah and but That's, that's not really a thing. Like you need to have this like bigger set up and you know, like you need to be in a space where like you can a hundred percent focus. Uh,
01:01:19
Speaker
Which, you know, for for these like a bigger frame trades that I do now, it's it's not really ah the case. you know I don't want to say that I can trade from my phone because I can, but like I can, you know, do stuff on the laptop. but I can go, you know, for a week somewhere and just have like sit in the kitchen the laptop and still be able to, you know, do everything ah that I need to do during that time. So.
01:01:44
Speaker
Yeah, but definitely like trying to and I know like there's a like a lot of people on on CT who are just like years on just like nonstop, you know, terminally online and and just going each day. But but i think like finding some kind of, you know, balance into this, like definitely like take the the overall trading and me not wanting to die so yeah that is also very very important not dying in the market and not dying like physically yeah yeah yeah yeah i think that's uh pretty much it for me do you have anything else that you want want to say i guess not really i think we spoke about a bunch of things uh yeah
01:02:34
Speaker
It was a fun
Conclusion and Farewell
01:02:35
Speaker
discussion. Thank you very much for for coming on. Thank you. Thanks. Thanks for having me. Of course. the Have a great rest of your day. You too. Thanks.