Jan 30, 2023
CJ has been trading and investing in crypto since 2017.
How did you come to be in crypto?
My path into trading began after I was called to provide incident response services to a client after they were hit with a cyber attack and subsequently infected with ransomware. A large red banner displayed the ransom note across the computer systems in the building - demanding payment in Bitcoin in exchange for access to data. I was mildly aware of Bitcoin prior to this but decided to start researching the tech in a more focused sense from this point on. What followed, I could never have imagined . . . I was fascinated ... I felt like it had the right ingredients and vision to be revolutionary. I was acutely aware of encryption tech, given my background in Computer Science and Cyber Security, so the cypherpunk aspect and self-sovereignty of digital assets that held value in the real world struck a chord with me. At this point, looking back, I was primed to dive deeper into the rabbit hole, perhaps get involved with the builder/dev space, or try the security angle of smart contract auditing, vulnerability analysis or security testing.
then ‘a few moments later’ - we dumped astronomically.
When did you start trading?
I found trading shortly after I started buying Bitcoin each month in Q3 and Q4 of 2017. At this point, I was convinced I had a natural gift for timing the market. I was unknowingly loading up on Bitcoin at a fantastic time, right before the historic run to 20k. I also started researching altcoins in late November into December and swapped all of my Bitcoin for Tron - as a complete noob, the ‘entertainment’ angle sounded appealing. The gains I had already witnessed from my Bitcoin buys then went 5X during the Tron pump. Insane. I had never experienced gains like it in my life. And then ‘a few moments later’ - we dumped astronomically. I managed to escape with a 2X, and thus, my trading career began. I just HAD to understand the mechanics of what transpired over the past few months.
It was the curiosity that started my journey, the drive to understand the inner workings of the crypto markets - but what followed and why I love trading to this day, is the freedom and autonomy that comes with being solely responsible for my own financial future. It’s the most intense, demanding, yet rewarding game on the planet, and I love the evolutionary and self-discovery aspect of it.
Have you tried your hand at other markets since, or are you crypto only?
I keep an eye on Forex, Equities and Commodities and have traded a few FX pairs but not on a consistent basis. Though, I’m looking to explore those markets further in 2023. I believe crypto will always remain at the core of my trading and investment activities, however, it has become clear to me that having a fundamental understanding of the macroeconomic landscape is advantageous in terms of helping to position capital more effectively.
Given that Bitcoin is highly correlated to the S&P500 at the moment and sensitive to DXY (Dollar Index) movements - analysing those markets helps to form a bias and provide context when trading crypto markets. My trading system appears to work well in such markets - so it makes sense to capture opportunities as and when they arise.
it has become clear to me that having a fundamental understanding of the macroeconomic landscape is advantageous
How long did it take you to become profitable?
I actually experienced moderate success around the 2-3 month mark after studying basic TA and executing a few trades. Friends in my initial circle commented that I had a good ‘knack’ for picking up TA, and it wasn’t long before I was sharing charts and banging out successful trades. However, it’s one thing to be profitable for a while and another to be profitable on a consistent basis. I experienced many killer runs, only to be met with the familiar gut punch of giving much of the profit back to the market. I had to fix this. After taking a step back, researching trading psychology (Trading in the Zone by Mark Douglas, great book) and learning risk management, I started to get better at minimising losses. Though, it took many lessons to become fully disciplined in this regard. I think every trader has a threshold. I have yet to meet a single trader that hasn’t experienced a significant drawdown at some stage or blown a trading account or two. But whatever your threshold is, once you reach it, internalise the pain and use it to your advantage. It enables you to come out the other side a different trader. Your battle scars are a reminder of the consequences of not following risk management principles. From that point, it’s not a decision anymore; it’s just who you are.
Your battle scars are a reminder of the consequences of not following risk management principles.
What does a typical day look like for you?
My routine has changed a lot over the years. From part-time trading and working a demanding job, to going full-time and having the luxury of designing my day as I see fit. For anyone trying to balance a full-time job alongside trading, it's always worth reminding yourself that your time spent at work generally equates to two 4-hour candles. Find a style of trading that is compatible with your lifestyle and the time available to you - and know that less is often more. You don’t need to be glued to the charts all day to be profitable, and never compromise your health for profit.
At present, I like to have a fairly loose framework in terms of routine and upregulate or downregulate trading activity to reflect market conditions. I don’t believe an overly strict schedule is necessarily optimal, but it’s important to know when to be at your desk. Some days can be very computer-intensive, at the screen most of the day trading, learning, researching, planning and catching up on socials. On other days I simply have alerts set at key levels of interest, and I’m off-screen taking care of other things.
Though not naturally a morning person, waking up early seems to be the most beneficial when it comes to balancing out the day. So I’m typically up at 0700-0730; depending on hunger levels, I’ll either eat or skip breakfast, work out or go for a walk, and come back and check the charts as part of the prep for the day ahead. If the market is quiet, I like to hone in on major assets, such as BTC and ETH, while ensuring I understand the macro context by checking DXY, SPX, NAS and any other assets that may impact the crypto market. When the market is on fire, I’m typically scanning my whole watchlist each morning and shortlist pairs to do a deep dive on for the day or week ahead. I also think it's very important to adapt your trading style to current market conditions, or simply wait until the market conditions return that suit your style. In the words of Bruce Lee, “Be water, my friend”.
Who did you look up to when you started trading?
At the start, I didn't look up to anyone per se; I was more exposed to traders that posted on TradingView, prior to getting involved in ‘crypto Twitter’. Elliott Wave counts were very popular, so at first, I learned the basics. A lot of people knock this style of analysis, but I have a certain level of respect for it. Those that have mastered the concepts are able to formulate impressive trade ideas. Though I appreciate having learned the basics, it wasn’t for me to see through to mastery. It was price action trading that resonated with me. Therefore, the most influential traders that I looked up to in the early days when things started to ‘click’ were primarily price-action focused. To name a few legends:
What's the worst thing about trading and why?
For me, it’s specific to the crypto market, and I now see it as my Achilles heel. I do care about the tech, specifically Bitcoin. I believe in its long-term vision. I love the self-custody aspect, and I think it’s a superior asset for storing value. I hate the traditional financial system, and I hate banks. So admittedly, there’s an emotional attachment there that can create an artificial weakness as a trader. However, I have enough experience and wisdom now to respect market cycles. For the time being, Bitcoin is considered a risk asset and behaves as such. It’s, therefore, in my best interest to continue to rotate capital in an optimal and efficient manner.
there’s an emotional attachment there that can create an artificial weakness as a trader.
Would you share with us your most memorable trade?
This would have to be CVX. I must give a shout-out to my good friend @Crypto_Condom. Very smart guy and an amazing fundamental analyst with a wealth of knowledge in the DeFi space. Thanks to him speaking highly of the project, I was able to get it on my radar early - and in trading, there’s nothing better than catching a setup early as it’s brewing. Especially for a swing trade. The fundamentals were promising, and I loved the chart - a match made in heaven. This was an A+ trade in my book and so allocated risk accordingly. Not only was it highly profitable, but the analysis, execution and management were also near-perfect. A few weeks after launching onto the market, it printed the classic initial pump into range formation. I started accumulating within discount, adding on confirmed S/R flips, prior to the massive breakout. Range-based fib projections gave minor and major targets, which I used to compound on the way up to $48-50, having bought in the $6-13 range.
What’s the best trading advice you’ve been given?
Plan the trade, trade the plan.
Plan the trade, trade the plan.
What's the most important quality in a trader and why?
I don’t believe there is a number one spot for the most important quality. I think patience, discipline and drive to succeed, as well as having the fortitude to endure the rough patches are vital. One I don’t hear too often that is relevant to the recent move we’re seeing in the market would be ‘adaptability’. It’s important to be able to shift gears when conditions change or recognise the need to adapt your methodology to current market conditions. That doesn’t mean you HAVE to trade in every environment, but if you are versatile and can adapt your edge to suit the current market environment, you’ll do well.
Why do you think you have success trading?
I consider myself relentless in any endeavour I believe to be of significant benefit to my life. Whether that be in the realm of fitness, career or otherwise. I will not rest until I’ve ‘cracked the code’ and I’m happy with my level of proficiency that produces consistent results.
I will not rest until I’ve ‘cracked the code’
How would you describe the way you trade?
Primarily range-based using price action concepts, liquidity theory, RSI and moving averages. When price is trending, I lean into more of a momentum-based approach with a heavier focus on moving averages. This is important as certain characteristics of price change. For example, while price is range bound, I view it as ‘liquidity hungry’ and expect sweeps, fakeouts, deviations, reclaims and typically deeper pullbacks within a larger consolidation range until a true breakout occurs. When price is trending, I expect the opposite - shallow pullbacks, less emphasis on sweeps (if any), true breaks from smaller consolidations, and so on.
This year I’ve also been focusing on Market Profile, VWAP and Footprint charts to better understand market dynamics, positioning and shifts in value. Big shout out to C2M, as he has been a huge inspiration in this regard.
What drives you to keep trading? What does ‘making it’ look like to you?
I love the challenge, opportunity and reward associated with trading. But ultimately, it’s about freedom. The challenge in building and executing strategies to compete with the market, the opportunity to directly affect your wealth and the reward of freedom by having enough capital to avoid working a 9-5. The combination of being solely responsible for your success based upon the level of effort you apply and realising the opportunity ahead is a powerful motivator. Therefore “making it” to me is having the ability to enjoy the freedom of choice. To choose when to network, discuss business opportunities, travel, learn, research and spend time with friends and family. I think humans thrive when life is more dynamic vs having a rigid structure, which is common with a traditional corporate lifestyle.
I think humans thrive when life is more dynamic
What's something you've learned in the last six months that has made you a better trader?
I’ve learned to better define my trading system and improve journalling. I’ve always kept trading notes to review past trades and market moves, but in the last 6 months, I have taken this to the next level with a more structured approach, which has definitely (unsurprisingly) had a positive impact. It’s easy to get caught up in the action and act out of impulse, but as a serious trader, it is imperative to work within your trading system so that you can reflect and improve.
As you take trades, you are generating a vast amount of data that, if harnessed in a meaningful way, can be extremely valuable. Think about the type of setups you take, when you take them, how you execute, your thought process, emotions during the trade, trade management, your reasoning for not taking a trade that you had planned, or taking an unplanned trade - what was it that caused you to act out of impulse, did it match a predefined setup? With this data, you can then turn it into intelligence.
For example, if you are someone that has a 75% win rate, but of those trades, 50% are closed early in profit - would your profitability increase or decrease if those trades were not closed early? If you find that your win rate would decrease, but your profitability would increase, you now have a compelling reason to stop taking profit early. Your journal is your feedback loop, which can be used to optimise your system over time.
it is imperative to work within your trading system so that you can reflect and improve.
What's the mistake you find hardest to avoid when trading? Any tips to avoid it?
Taking unplanned and sub-par setups. After years of trading, it’s easy to glance at a chart, spot some interesting price action and feel compelled to open a position. Sometimes that works, and usually, the best trades are the ones that do jump out at you straight away, but I’ve found that it’s imperative to perform your usual checks to qualify the trade to determine whether it’s an A+ setup, or you’re rolling the dice on a B-. Having a framework for analysis and execution, even a simple checklist to run through before taking a trade, is very important.
the best trades are the ones that do jump out at you straight away
If you could give someone starting trading tomorrow one piece of advice, what would it be?
Don’t overcomplicate things. There is an abundance of information out there on trading with varying degrees of quality that cover a wide range of techniques and methodologies. Find what resonates with you and understand that less is more. Focus on getting good at one or two types of setups and spend time backtesting to gauge effectiveness. You may not see the same exact price action repeat, but you should be able to break down the components of a given setup and describe it in plain English so that you understand its mechanics and can take future trades based on the described logic. Many new traders follow as many people as they can in a flurry to ‘learn all the things’ and ‘get rich quick’. It doesn’t work like that. Slow down and maintain the focus. Oh, and learn risk management. Whether you learn it the easy way or the hard way is up to you.
Find what resonates with you and understand that less is more.
Fill in the blanks
Most traders would be better off simplifying things.
What separates the pros from the rest is risk management.
A good trader should never deviate from their system.
The biggest misconception about trading is you’ll get rich quick.
Any other comments you'd like to share:
Firstly, just a huge thanks to those that I very much respect for sharing knowledge week in and week out and helped me up my game over the years:
TraderXO, RektProof, TraderKoz, TraderMayne, CBS, RJ, C2M, TraderSZ, Crypto Chase, Cred, Tom Dante, Credible Crypto, PoiSzn.
Also, my brothers in the compound and friends that I talk to on a regular basis - you know who you are. Having a tight knit circle of friends and traders, where it's fun to chat and share ideas, is imperative. Can’t imagine any journey without it.
Lastly, some free alpha - it’s extremely advantageous to know when Trader Koz is flying.