Crypto trading - some personal takeaways from 2020
Disclaimer: my job requires picking investments, at times with short/medium term view (days-months), many times with a long term view (years).

This is mostly a thread on reminders to myself relating mostly to the former.
Watch out for decisions based on fear & greed

Confirmation bias (ignoring contrary signals), anchoring bias (married to entry, trading PnL), sizing too big on low r/r trades, hesitating to buy cheap assets because "it's fallen/rallied too much".

/1
Minimize regret

Constantly question whether you have done all you could to maximize returns in the past month/quarter. Review all tools at your disposal (vol strats, momentum strats, fundamentals) but don't Dunning-Kruger yourself. There are no jack of all trades.

/2
You can't catch them all

Don't regret missing out on a few trades/ investments. Better to win big on 1 high conviction idea then win big on 100 small ones. Be ok with missing out but be ruthless with not learning from it.

/3
Don't always work harder

Optimize for 4-5 GREAT decisions a year over 50 mediocre decisions. If you're on tilt or in a rut, doubling down will compound your losses. Take time off, re-assess your strategy, then return. The market will always be here.

/4
Create scalable processes

Re-read Fooled by Randomness. One good investment is a lucky bet. One good quarter doesn't make you a fund manager. Find out how to be consistent and constantly evolve this.

/5
Find your brain trust

Everyone talks their books. Recognize who is only out to "pick your brain" with no intention to reciprocate. Watch out for groupthink, but play iterative games with long term people. Always seek dissent, but ignore uninformed people with loud voices.

/6
Distinguish between investments and trading

Trading is exchanging time for money. Investing creates wealth when you sleep. Former is what you know. Latter is what you know and who you know. These skills seem ostensibly similar but require different inputs to nurture.

/7
Find your North Star

Crypto is small; place your reputation above all else. Never let short term profits, regardless of how enticing, come before decisions that optimize for longer term value creation.

/8
Finally - remember "學如逆水行舟,不進則退"

/fin
Really grateful to have "met" many who helped me improve on the above this year - just to name a few who all deserve your follows:

@Arthur_0x @AviFelman @HassanBassiri @ConvexMonster @CL207 @Rewkang @MapleLeafCap @lightcrypto @Daryllautk @Darrenlautf

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Jason Choi

Jason Choi Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @mrjasonchoi

2 Dec
🚨 This week: the rise of the DeFi "super app"

@AlphaFinanceLab is one of the projects I'm most excited for in DeFi today.

Founder @tascha_panpan joins me to talk all things $ALPHA.

apple.co/3ogto4K
spoti.fi/36sHFVL
.@AlphaFinanceLab is a team of young and driven DeFi coders + operators focusing on shipping synergistic products.

Imo this is where many DeFi protocols are heading, culminating in the rise of DeFi "super apps".

More on this in a bit.

1/x
Alpha first came to market with a simple product: a way for people to lever up on their DeFi yields.

With Alpha Homora, users can lever up 3x to farm assets like $SUSHI and $UNI.

2/x
Read 13 tweets
1 Dec
A weird thing about sizing bets...

Short brain dump.
One strange thing I noticed in myself in the beginning of my career and among other young investors is the tendency to size too small on ideas with conviction, and size too big on ideas with lower conviction.

It's counterintuitive but it seems common.

1/x
"Dammit I should have sized bigger! I had a strong thesis. I don't know why I didn't."

"Why did I bet so much on this? It's all XXX's fault for fomo'ing me into this."

Statements like this are manifestations of the above.

2/x
Read 11 tweets
24 Nov
Since launch, @dydxprotocol has made $2.4M in fees at a 30% monthly growth rate.

But they have much bigger ambitions... 👇
"Our goal is to become one of the biggest exchanges in crypto, PERIOD. Not just one of the biggest *decentralized* exchanges." - @AntonioMJuliano

That's ambitious considering centralized exchanges are raking in *billions*. How do they plan to pull this off?

1/x Image
At a time when DeFi automated market maker (AMM) like @UniswapProtocol are overtaking volumes on industry giants like @coinbase, dYdX is sticking to its guns:

"AMMs are good for long-tail assets, but we fat tail volumes are better for order books"

2/x Image
Read 7 tweets
19 Nov
1000% APYs were never sustainable...

There are two main ways to juice DeFi yields in a more sustainable way than pumping a gov token with thin float.
1/ The quickly scalable way is leverage.

You borrow from @AaveAave or @compoundfinance then farm with a @iearnfinance vault or directly as an LP to AMM farms.

Or you let @AlphaFinanceLab take care of it for you in one tx.
2/ Risk here is your impermanent loss is amplified if you’re an AMM LP.

Could imagine some packaged product in the future that helps you hedge against this but it’s not easy.
Read 6 tweets
16 Oct
Synthesizing the AMM vs. CLOB debate going on currently.

These are unrefined thoughts and there are much more informed MMs, LPs, devs out there than me.

So feel free to tell me if I miss anything!
1/ First:

I think it's important to think of what you can/cannot do with either to figure out what the USP is for both. Apples to oranges if compare AMM IL with CLOB spreads.

AMM: democratize market making, long tail focus
CLOB: tighter spreads, fat tail focus
2/ AMM's gamechanging feature #1 is anyone can be a market maker + earn passive fees!

Most people who fit the LP profile probably don't care too much about IL unless asset prices diverge significantly over time, in which case fees need to be sufficient to cover.
Read 14 tweets
12 Oct
Short selling in crypto

A brain dump...
Short sellers have been getting a lot of flack on Twitter lately.

While I'm bullish about crypto/ DeFi, here's a devil's advocate take on shorting 101 and why it's not as evil as crypto twitter make it seem to be.

Obviously not financial advice, just personal opinions.
1/ There are a lot of misconceptions about shorting. It's seen as "manipulative", even "evil".

In a space where most retails are long-biased and only want number to go up, shorting is seen as something conniving and devious hedge funds and traders do to "screw over" retails.
Read 20 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!