Opinion not for sale.
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Feb 19, 2023 • 25 tweets • 6 min read
random discretionary trading "alpha"
aka, something you can use as a framework to think about what a market is doing, when it might change and why you could potentially make money off of it:
Fair value (a thread)
this is a chart, on a timeframe, of a thing. It doesn't actually matter for the sake of our discussion what the timeframe or thing actually is.
All that matters is understanding what it is doing, and figuring out how that knowledge might help us make money in the future.
Jan 25, 2022 • 5 tweets • 1 min read
on the note of funding, $OXY and $MAP are interesting case studies atm
both have funding currently paying longs in excess of 1% daily
both have also more than doubled off their recent lows.
Funding and performance must eventually reconcile. I'm long until... (cont)
...either price reverses the low-timeframe trend and aligns with the funding (resumes trending at a rate somewhere around -1%/d) or until funding (aka the premium) shrinks to reflect a more neutral view of those markets.
Dec 26, 2021 • 4 tweets • 1 min read
a protocol run on a governance system
except instead of tokens, voting weight is determined by total fees paid by the protocol, time-weighted for recency
token could still be implemented, but as an overt security (entitled to revenue disbursements/dividends)
this could also be accomplished w a dual-token system, one for governance and one for dividends
the governance token could be emitted without regard to keeping market price propped up as a reward for usage, whereas the dividend token can be rewarded for utility.
Dec 26, 2021 • 4 tweets • 2 min read
market price and intrinsic value are two totally different things
bayc isn't *worth* a penny over 0.
almost nothing in crypto is
we're all playing hot potato games, you only win if you buy for less than what someone else will later pay
TIL that most of you have no concept of the difference between intrinsic value (a measure of utility) and assigned value (a measure of preference)
the market value is determined by participants' assessment of an asset's intrinsic and assigned value, plus an accessibility premium
Dec 24, 2021 • 13 tweets • 3 min read
Merry Christmas, here's some genuine free alpha that you can use
Funding Rate vs Realized Drift
automation not required
most of y'all think of the funding rate like RSI; negative = oversold, positive = overbought
but you're wrong, it's way more specific
the funding rate on most exchanges is determined by taking the average difference between the perp price and spot asset price over [n] as a %, multiplied by n/24, where n is the number of hours per funding period. Sometimes + a default rate.
Dec 24, 2021 • 4 tweets • 1 min read
I think the biggest misconception I had about "doing quant stuff" when I first started it was thinking that I needed to automate or code everything
code is helpful, but spreadsheets, tradingview indicators and maybe some really basic CLI/terminal tools will get you v far
the second-biggest misconception was that I needed a super-secret complex strategy to compete
in reality most of the mechanical/quant guys I've talked to (incl myself) just kinda found some basic inefficiencies or cheap risk to make money from regularly
it's not usually v fancy
Dec 23, 2021 • 4 tweets • 1 min read
a lot of you hope to make enough money to trade full-time
lemme give you a thought:
if you can't reasonably expect to make 10%/y with 95%+ confidence, you aren't ready.
regardless how big your balance is
it's not as much about how much money you've accumulated
it's more about your expectation of return, and your variance on those returns.
Hitting one (or even a couple!) big winner(s) does not mean you're ready to trade for income unless you also have a proven record
Dec 22, 2021 • 4 tweets • 1 min read
I've not heard of watsi before, but they look about as transparent and cost-effective as it gets for charities
also as a side note, imo the coolest thing about making money is the leverage that it offers on the world around you
idc what that happens to be for you, could be charity, funding new startups, research, sponsoring an open-source dev, literally anything
Dec 22, 2021 • 4 tweets • 1 min read
here's one of my current synthetic long/short portfolio accounts (this one is a self-contained portfolio)
long 77.6% $BTC
long 151.1% $SOL
long 2.8% $ETH
short 90.4% $SRM
short 31.2% $ADA
I rebalance it every [redacted] w the goal of being 1x "long crypto"
there's plenty of ways to achieve this, but I share to illustrate one of the ways that leverage can be used effectively; to balance positions against each other in order to meet a certain portfolio goal
Nov 18, 2021 • 8 tweets • 2 min read
mini-thread on managing leverage
I regularly run accounts at 3-8x leverage, not to over-size but to reduce the amount I have to keep on exchanges
but this means a bit of extra management. While trades might be sized properly, it's important to consider liquidation risk
while these accounts are usually hedged to some degree (either capturing basis/funding or doing some form of pair/beta trading), even if I'm sized to lose small on a loss, the total margin is also at risk if the trade goes sideways, which means there's a risk of losing bigger
Nov 9, 2021 • 14 tweets • 3 min read
in a thread-writing mood (aka I'm bored and definitely not doing drugs)
So let's talk about volatility:
-what it is
-how it's calculated
-how it might be useful to point & click traders
What it is: in plain terms, volatility is a measure of how much a trading pair's price bounces around the benchmark value, which is usually set to the average closing price.
A trading pair that spikes and drops by a lot around its average price is considered volatile.
Nov 9, 2021 • 4 tweets • 1 min read
remember kids:
if you're bidding a level and betting on a pullback, if the market is strong you're unlikely to get filled and will probably get left behind when the market rises
but if the market is weak and you misread it, you're guaranteed to get filled when the market drops
don't get sidelined when you're correct, ask your doctor if using Market Orders is right for you!*
*Side effects include increased testosterone, strike rate and sex appeal. Some studies show using market orders can lower the chance of rugpull or being kicked out of the basement.
Nov 4, 2021 • 4 tweets • 1 min read
I know it's 4am but I don't know what a schedule is so here's an article about market-making
gives a very general overview of how it works, very basic strategy and how to think about it
does not cover implementation (aka, coding a bot)
idrawcharts.medium.com/how-market-mak…
there's a ton of stuff I didn't mention or talk about (might do a part 2 later) but this kinda gives a very elementary example of thinking from a MM's perspective
Nov 4, 2021 • 6 tweets • 2 min read
this is a shot at chamath lmao
but also highlights importance of trade conviction and sizing
common advice is to gradually scale out of winners, but if you're early in something and it's starting to prove that it'll deliver?
what about like a panic button for account security
that lets users immediately hard-lock their account from all logins/changes/withdrawals on suspicion of unauthorized access until completely re-verified
@SBF_FTX@FTX_Official cuz like, I can freeze my debit card or bank account if compromised and those transactions can be reversed
I'd love to be able to freeze my trading accounts because those transactions cannot be reversed.
Having available via API endpoint would be nice also in case locked out
Oct 27, 2021 • 9 tweets • 2 min read
I can't really stress this enough, if your outlook on...
- how the broad crypto market behaves
-marketcycle patterns
-capital rotation motives
-who your counterparties are
...is the same as it was 2 years ago?
I think life here is going to get much, much harder soon
most of crypto is not going to trade like it used to for much longer
Think it's throwing some natives off
Less and less upside for alts bc VC capture while most non-corporate launches struggling to gain traction
That's just one example of new/different forces here to stay
Oct 27, 2021 • 4 tweets • 1 min read
if you catch 10 pumps
that each go 10x
w 10% of your portfolio at a time
you'll have made over 2000x on your total starting amount.
on $500, that's $1m.
on 10k, that's $20m.
shit REALLY adds up, there is no need to gamble or throw everything into one bag
I promise, you can make way more than you think w/o risking the house every time you take a swing
Oct 27, 2021 • 9 tweets • 2 min read
ok so I always talk about having a plan for *BEFORE* things happen
so lemme just talk you through the basics of what I'm thinking and planning rn
using this chart (I watch a lot of other stuff besides charts, but this will do for the example)
top grey line: previous ATH
indicator on the chart: volume profile for previous ATH distribution range. This is important.
the value area is marked by the second grey line and bottom red line
the value area mean that price was accepted into that range previously
Sep 22, 2021 • 13 tweets • 2 min read
Need to explain crypto/defi terms to your grandma?
Here's a handy list of crypto-native terms with a 1-tweet ELI5 explainer for each.
Bookmark the thread and if you want something added, just ask!
1/n... oh God there's gonna be so many
Smart contract:
Think of it as a computer program that does one specific thing, and it's always running, just waiting for you to send some basic instructions.
Sep 22, 2021 • 18 tweets • 5 min read
ok didn't really come up with a singular thread topic so I'm just gonna stitch together some of the q&a from people and shit in a rambling, disjointed mess of a post below, enjoy (or don't, idgaf)
but assuming worst-case scenario (US chases down devs for building non-compliant products), we go anon, deploy on IPFS, use mixers and build more privacy tech.
