Jul 11, 2022
lowstrife is an idiot who shitposts ideas where it can either go up or down so I can look back in hindsight and say I was right.
What attracted you to trading?
It happened by accident. Trading LTC on Mt.Gox was what lured me in, to make money like anyone else. It wasn’t even trading really, just getting onboard like everyone else. Trading happened by accident. I realized I could make my balance go up by doing specific things. It became repeatable. It was a totally natural discovery and understanding of markets.
How long have you been trading and what markets have you traded over your career?
Crypto since 2013. I participate in stocks nowadays as well, though not terribly often. But that’s about it. The day I’m writing this is actually to the day 9 years after I made the first-ever purchase of crypto for $25 as a broke college student who had negative disposable income. Incredible how time passes.
What is it you like about trading crypto over other markets?
I mean it’s what worked basically right away, and the first thing I tried trading. So that first impression translated into a lot of time spent back in the day only focusing on crypto. Stocks have all of these “other” things to deal with, from market hours to earnings to the FED doing wonky shit and stuff beyond your control fucking with the price. Crypto was very organic in comparison. Keyword: was. Less so these days.
How long did it take you to become profitable? Were there any major milestones where things just started to click?
Unlike most people, it was basically right away. I think the difference is that the market was blindingly, stupidly, insanely easy. Things were different back then. Strategies that worked then don’t work now. Volatility was a lot higher too. But the first true access to profitability where the numbers started making sense was when I first had access to leverage. That changed everything. Being able to express an idea that the market will go down by shorting opens up all kinds of interesting possibilities.
Being able to express an idea that the market will go down by shorting opens up all kinds of interesting possibilities.
Did you immediately have success shorting or did you need to adapt your system?
It more or less came right away and structurally is no different than longing. Though this did occur during the 2014 bear market so the market conditions were right to open up your avenues. It is a different set of skills though - you have to know when you’re lucky and apply them.
What does a typical day look like for you?
My normal life where I don’t trade is normal. Participating in the markets is totally a-typical. You react when the markets move. You don’t get to choose when opportunities present themselves, so by nature, there is no typical trading day.
What are some things you enjoy doing while waiting for markets to move?
I’m not one of these people to do Yoga and meditate and scout for opportunities and whatnot… if I happen to be at the desk when the markets move, I react accordingly. Games, work, research, building systems, music, there are a ton of pastimes. But the rule of not trading while I’m out with friends or out “doing things” means I have to be at the desk, waiting for markets to move to actually capture anything.
Tell us about your most memorable trade?
This chart I published, including the updates I gave to it over the following months. To have such strong convictions about such a powerful move. Only a tiny fraction of my thoughts are captured here, much else was in chatrooms which are lost to history. But I have a pretty strong emotional response to this time period.
What did you learn from this trade in particular?
Know when you’re lucky. And frankly? I’m not sure. There are lessons from that “time period” of the grifts and ICO’s and shit in this space starting to jade me. But in one isolated trade, I don’t particularly walk away with many lessons. Especially when you make thousands of them, they mostly blend together.
What’s the best trading advice you’ve been given?
Once you understand that SBF is better than you and he controls the market, you’ll be a lot happier. The implication I’m explaining here is that HFT & sophisticated market-making removes a lot of profitable opportunities that once existed in the market. You have to be even better above the mean to be successful and keep the ship afloat. There are (less often) enormous dislocations that are basically just free money because nobody is making the books or arbing it out.
HFT & sophisticated market-making removes a lot of profitable opportunities that once existed in the market.
What drives you to keep trading?
We all need to eat - a roof over our heads. I’ve found a career quite early on and managed to make it work - and have no desire to leave. You have to be obsessed about it a bit too - something like that doesn’t easily go away especially when it provides for you & yours.
Would you say you’ve ‘made it’? If not, what does ‘making it’ look like to you?
If you say you’ve made it, you have no further progression in which to grow or to continue the modicum of success you’ve achieved. So I’m not going to directly answer this because I believe it’s a flawed question.
I drive an impeccably maintained 20-year-old Toyota and live way below my means. A friend and I had a conversation about people buying Lambo's and all these displays of wealth with their profits and he wondered why I didn’t indulge in that. My only response was: “How do you think I’ve stuck around this place so long?”
What's the most important quality in a trader and why?
Control over their particular process of execution. Knowing yourself and knowing the situation the market, and you are in. When you’re on tilt trying to recoup a bad trade. Of all the professionals at their craft that I know, they all trust in their process. They already know before the trade even occurs.
How would you describe the way you trade?
Frantic. Close to market-making. I like to catch “mean reversion” swings.
Why do you think you have success trading?
At first, it was because the market was stupidly easy and there was free money everywhere. But that allowed me to be profitable and buildup as things evolved to be more difficult. I understood the markets I was participating in at a very high level to dodge a lot of the landmines (technical problems, existential problems) that happen throughout the years.
At first, it was because the market was stupidly easy and there was free money everywhere.
How did you come to that understanding, do you have a financial background or was it just intuitive?
Intuition. Pure and simple. I had zero traditional financial education and didn’t even start learning how the normal stock markets, the fed, interest rates, bonds, commercial vs. investment banks, options and all this other shit even worked until a couple of years ago. It was just gambling at first. Click red button, click green button. Hopefully profit more than loss.
What's the worst thing about trading?
It sometimes takes people years to learn how to disconnect from the market and live their life. That was the hardest thing for me. 2015-2017 was an absolute grind. I found balance after that. If someone answers “losing money”; they haven’t come to accept the natural course of the probability of what it takes to be overall profitable. It’s a series of chances, and odds. If losing money is the most painful part of trading, you won’t last long. Missed opportunities hurt more for me.
Another point, somewhat related, is the 24\7 nature of crypto. Shit can go sideways at 3AM on a Saturday. China used to dominate the microstructure years ago, which used to dictate a very difficult lifestyle where volatility would continue long into the night for the west. But with crypto being so closely correlated to the legacy stonks these days, that era has mostly passed.
If losing money is the most painful part of trading, you won’t last long.
Do you think it will stop correlating or is the decoupling a meme?
On a macro-trend, it may decouple yes. On a micro-trend (hour by hour or even second by second)? Maybe not. I’m not sure. There are days when it’s 1:1, there are days where things go in opposite directions. I hope it does decouple. But I think it’s unlikely to fully decouple like it was pre-2020 because of just how large the liquidity pool is and how the involved players are.
What's something you've learned in the last 6 months that has made you a better trader?
That I don’t have the tools to be able to do the things I’ve always wanted to do. But I hope to see some of those things start to develop. I see a lot of startup platforms providing them. Data, execution, charting, heatmaps. Knowing you don’t have the tools to execute an idea is freeing in a way. IDK why.
Knowing you don’t have the tools to execute an idea is freeing in a way. IDK why.
What's the mistake you find hardest to avoid when trading? Any tips to avoid it?
Separating wishful ideas of the way you wish the market would develop from practical ideas of the way you think the market will develop. I’m very specific in my wording here. The thesis is avoiding hopium. I’ve always relied on gut instinct and reactionary trading to provide success which doesn’t give you time to think about these things. That was my solution to solving that problem. Other people find different solutions.
Is trading with your gut an emotional method of trading? Would you advise aspiring traders to be more systematic?
Yes it is. I think emotional is a reasonable way to slice it. You have an intuition about XYZ, whether it’s based on gambling emotions or subliminal logic\experience. I don’t advise aspiring traders to even trade - the odds are against you, and you will lose money in the long run. And what works for me may not work for anyone else. I know plenty of other traders who have completely different styles, doing things in manners in which I could never be successful.
If you could give someone starting trading tomorrow one piece of advice what would it be and why?
Don’t do it, statistically, you are not going to be profitable. I’ve seen countless people get thrown into the meat grinder of the markets and rather than going out into a bang of glory, they fade with not but a whimper. If you do decide to continue irrationally, “paper trading” with a fake account is a waste of your time. You need to obsess over everything for a while to truly learn the emotional and psychological stresses that are put on you when real money is on the line. That is where the learning begins. Paper trading teaches you nothing.
Fill in the blanks
Most traders would be better off not trading.
What separates the pros from the rest is how much money they have.
A good trader should never go all in.
The biggest misconception about trading is how it’s glamorized on TikTok investing or Youtube vloggers. Those are all complete lies and fabrications. The truth is every single successful trader I know sits on their computer for an unhealthy amount of time every single day becoming one with the market. Not just gathering knowledge about the market, but an understanding of the market. There’s an analogy said by someone whose name escapes me, but the gist is such: It’s like making a sandwich. You know it needs two pieces of bread, some pre-murdered meat, some mayo and you’re good to go. But to have an understanding of a sandwich is to understand the chemistry of the bread, how to bake it, and why the yeast does what it does. How to raise the animal and care for it to be able to have it bear fruit for your meat. Why you would even do these things in the first place instead of just putting nacho chips on pita bread with ketchup and steak sauce. You never reach a true understanding, nobody does, but it’s the journey to get there where you can find success.