6 High Stakes Capital
Jan 17, 2022
Highstakescap is the former #1 trader by PNL on FTX and ex online poker pro.
What first attracted you to trading?
I was first drawn to trading as a means to accumulate more Bitcoin.
Oh? What was your early thesis regarding crypto?
I've always been interested in the idea of having digital money outside of banks. I heard about Bitcoin in 2010-2011 and read a thread on 2p2 (a famous poker forum), but I didn't get how the decentralization worked at the time.
Then in 2012, I heard that Wordpress is accepting BTC and that Peter Thiel has invested in it. I spent more time understanding it and told myself that, this time, we may have created native internet money that could not be stopped. I tried to invest $20k in 2013, but my bank blocked the transfer. I got it through eventually but ended up with a fraction of the BTC I'd otherwise have. I hate banks.
MtGox and the following bear market hit me hard, so I started to trade out of revenge, driven to accumulate as much BTC as possible.
Tell us a bit about that journey.
I was an online poker player for years before becoming a trader - and I've been trading for six years full-time now.
I wasn't focused on trading at first, I was more interested in creating a Bitcoin start-up, but I didn't find any viable use cases at the time. Then, I became 100% focused on spot trading in 2015 and margin trading in 2016. I was profitable from day one, and my net worth virtually exploded in 2017.
I lost big in 2018-19 and exploded again in 2020-21. I like to take high-risk high-reward trades. The variance doesn't bother me that much.
What does an average day look like for you?
I don't have a daily routine right now as I trade over a longer time frame, but when I was really focused on the market, it was as follows:
Wake up, check price, 15 minutes of cardio, breakfast, check Twitter and the market, talk with friends about the market, lunch, check the market and my positions, go to the gym or go out, restaurant and then check the market at the end of the day. 85% of my days were like that for several years, even though I was travelling.
Today, I'm almost never in front of my screen. I check Twitter, the charts and adjust orders from my phone.
“TODAY, I’M ALMOST NEVER IN FRONT OF MY SCREEN. I CHECK TWITTER, THE CHARTS AND ADJUST ORDERS FROM MY PHONE.”
What's the worst thing about trading?
Nothing, I love the game and the life that goes with it. I enjoy the freedom, no boss, no clients and the detachment of money.
What drives you to keep trading? What does making it look like to you?
I don't see it as work, so there is no retirement. You play until you lose enthusiasm, then find another game. You play, you gamble, you trade, you invest. It's a way of life.
I enjoy growing accustomed to feeling uncomfortable in a trade. Having the conviction to deploy all your net worth, whether small or big, is a feeling that doesn't get old.
What is your most memorable trade?
I was trading all-in my net worth ($500k) in early 2017 on Bitfinex with x3 leverage and lost about a third of my total net worth in minutes. I didn't cut and didn't have stop-loss. I was underwater for weeks, close to a month, but in the end, it turned into my biggest win. It changed everything on how to handle the pressure. After that, I knew I was made for high-risk high-reward trading.
My second most important trade was when I was long 8-9k. Everybody was bearish at that time. After seeing price consolidate for months, I decided to long because I felt a breakout to the upside might not provide a retest, and I planned to hold this trade to 50-100k.
I entered at $8,700 and held the position for 19 days with big ups and downs in terms of uPnL, but eventually, cut it at break-even. I was tired of the price action and tired of not sleeping enough. Literally, the next day BTC broke out. I revenge traded hard - going long at $9,200. I held it until 40k. It was a fantastic swing trade and a big winner for me.
On the losing side, I lost ⅔ of my net worth in May 2021, so I decided to take some time off. When I returned to the market, I got it all back 2.5 months later.
What's the best trading advice you've been given?
None. I didn't listen to anyone, and I never read or watched any material on trading. I learned from my own mistakes and market observations. You have to find your own way to trade. You can't blindly follow standard trading rules and expect to outperform. You must find an effective way to do what others don't.
“YOU HAVE TO FIND YOUR OWN WAY TO TRADE. YOU CAN’T BLINDLY FOLLOW STANDARD TRADING RULES AND EXPECT TO OUTPERFORM.”
What's the most important quality in a trader?
There are a few, but I'd say probabilistic thinking, common sense, self-awareness, resilience, patience.
Why do you think you have success trading?
My mindset: I see myself as a warrior of the market. The mental aspect is more important than charts.
Fortune is made by big wins, not by compounding small ones. Patience to bet big is critical. Most traders constantly change their view on the market under the pull of their emotions which is disastrous when combined with leverage. It takes a strong mind to handle the pressure and deal correctly with significant losses.
What's something you've learned in the last 6 months that has made you a better trader?
Keep it simple:
In a bull market: long the fear, take profit in euphoria, repeat
If the trend is uncertain: stay on the side or "gamble" on the break
In a bear market: short every up or even better, take vacations
What's the mistake you find hardest to avoid when trading?
I still fight the urge to try and catch the top of the bull market. As a crypto believer, I have a bullish bias, and it's more challenging to time tops than bottoms. Even if I know it's better to sell in increments during the "peak" of the bull market; I've always tried to catch tops because, after all, I consider myself a gambler.
“I’VE ALWAYS TRIED TO CATCH TOPS BECAUSE, AFTER ALL, I CONSIDER MYSELF A GAMBLER.”
If you could give someone starting trading tomorrow one piece of advice what would it be?
Your mindset and control of your emotions are more important than charts. Most traders know it, but very few work on it.
FILL IN THE BLANKS
Most traders would be better off not day trading.
What separates the pros from the rest is their mindset.
A good trader should never have certainties.
The biggest misconception about trading is that Technical Analysis is the Holy Grail.