Does trend following work differently on the short side?

A thread, about the answer, but also how to approach questions like this

1/

https://twitter.com/noalphadecay/status/1962569033766650131

The usual way retailers approach something like this is to run a backtest and take the best approach

This is shit. Don't do this, for many reasons, all of which boil down to the 3 types of overfitting (explicit, implicit, tacit)

/2

A thread on trading slutty carry trades on shitty perp dexes

/1 When products and protocols are new they tend to trade a bit different

Generally you can make decent money taking a known trade and applying it to something new

Lets show you how

/2

My journey with @HyperliquidX

A thread of missed chances, and second chances

September 2023 I asked @therobotjames about trading stat-arb carry on HL

He kwanted for 10 whole minutes, came back with a chart and a single word

"would"

So I did

https://twitter.com/kirbyongeo/status/1867958297577549846

Yeah I got an airdrop from that, and stat arb carry worked gud like it does everywhere new

My big miss was we had a choice between HL and dydx

At the time it was a line ball decision but dydx was 4x the size

Generational fuckup

/2

A thread on being a trading slut and expressing your trading ideas in the dirtiest way

1/ My bro @AntoineRSX and I were talking about a trade today (its alpha not risk premia so I won't discuss it, instead I'll use a commonly known example)

And we were talking about how he could get trading quick rather than building a bunch of infra

/2

Why this isn't as dumb as it looks (a talking my own book thread)

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https://twitter.com/ScottPh77711570/status/1945290188130746593

There are only two elements to trading

1. How much do I like the trade?

2. How much do I want to bet?

This is it, there are no exceptions

/2

This is a neat illustration of the difference between running trend CTA style and delta-neutral
/1 Let me tell you a couple of three things...

Firstly, CTA trend just shorts the stuff that goes down, so if the market kept going down it would have made a lot of money, and did make a lot of money recently...

But it's about to take a dick right in the ass today, balls short into a risk-off pump

/2

Can my frens do @therobotjames and I a favor pls (r/t if you can)

We are opening up our trading systems as a vault on the HyperEVM, but we have no conception of normal people risk tolerances

These are 10 randomly generated equity curves at Sharpe 2 (we should be comfortably higher than that, its crypto) at various volatility levels

The 3 equity curves are best, worst, median

Poll follows
/1

Which would you prefer (higher vol = higher drawdowns, more luck required)

Unsurprisingly, taking more risk is... risky

Thanx frens!

This is a truly brilliant move in the orderbooks

Massive balls. Masterfully executed

And I thought it was a Trump insider, @zhusu correctly called it as a flipper

Let me break it down

1/

https://twitter.com/zhusu/status/1899722717504634941

For some background see this excellent thread from @0xkinnif

The short version is that hyperliquid orders/trades are *on the blockchain* so everyones cards are visible

That makes it weird

/2

https://x.com/0xkinnif/status/1899720420359868428

A thread on how good trades die
🧵
1/ There are two types of trades

1. We get paid for taking on risk (buying breakouts, carry trades, selling vol, buy and hold, etc)

2. We have found people willing to trade with us at bad prices (for them)

This thread is on the second, rarer kind

/2

How to trade

A not-engagement bait thread

1/ A lot of retail gurus tell you the markets are beatable

If only you have a plan and stick to it

Or carefully log all your trades

Or journal about how your mummy spanked you and it made you take off your stop loss on audjpy

This is bullshit, obviously

2/

Trading the backside of short squeezes

A thread for shorting dogshit
🧵
1/ Think about the things that make crypto unique

- Desire for leverage
- Frictions on and offramping causing positive feedback effects
- Frictions within chains causing eg "Sol meme szn"
- the desire for exit liquidity (crime)

2/

Sensible crypto strategies for the stonk guys

High level: Crypto is riskier than stocks and the markets are less efficient

The implications of this are:

Any "risk premia" harvesting will harvest more risk on crypto

Any price inefficiencies are likely to be less competitive

1/ Let's talk about style premia

The same basic factor stuff that AQR and others do on stocks (except for value cos crypto has none) really works.

There's some buts here but lets look at the simple stuff first

/2

Current trend system signals - when the signal is positive we buy, negative we short

BTC - been rockin a max signal for a while now

1/ Dino coins - Yahtzee

/2

For my trench dawgs fighting for their very lives

Let me show you something useful about trading shitters

🧵 First thing to understand about on chain trading small coins is that the whole ecosystem, as a whole, is value extractive

The fees, spreads and the grift means that for every $100 players put in, they are getting far less back out

1/pump.fun

Since my last thread I've been asked a bunch of questions about Bangkok

None more important than "where can I get the best blowjob I've ever had?"

🧵

https://x.com/ScottPh77711570/status/1852998208072650847

Sex tourism in Bangkok is frought with annoyances

Getting ripped off, catching diseases, and getting annoyed

The "what your name, where you from" conversation you get at go go bars is so tiresome

A thread for those going to ETH Bangkok

The stuff you *really* want to know

Where to eat, where to party, how not to die

Buckle up, promise it will be good

🧵 For a start the basics. Bangkok is unfathomably huge

Enormous

And mostly very safe (until it's not)

Problem is, there are no guardrails to stop you doing really dumb things

There are rules here, they just aren't gonna make much sense to you

Totally alien

Good question. Let's answer it 🧵

Stop losses are INEFFICIENT

They reduce the returns of any system you apply them to

1/

https://twitter.com/ozfrox/status/1827803331705659791

You can intuit this because the effect of a stop loss is to reduce your risk on <condition>

Reducing risk HAS to reduce returns or you have broken some fundamental laws of finance

2/

@akatasonov @0xLoris The scam works because spot markets in small coins can be easy to push around

DWF finds projects about to go broke and “invests” in them, buying a large % of supply at deep discount

1/ @akatasonov @0xLoris They “market make” with a bias to push the spot market up, which is pretty easy it just costs money

As soon as the market cap goes up they can use contacts to get exchange listings for perps

2/

@AnyonCurve @TheMisterFrog This is a nuanced topic

Some thoughts in no particular order

Crypto is obviously a less efficient market

Part of that is that the early holders were taking massive risk (I owned BTC $4 and sold at $21 back then, it was really sketchy)

1/ @AnyonCurve @TheMisterFrog So that risk premia has to come down over time, the closer it gets to a normal market the less risk there is

Crypto you get paid for a bunch of counterparty risk, and a bunch more risks that you don't even know you are taking (smart contract, hacking, encryption)

2/

There’s quite a lot of hype around the CTA’s which got a chunk of the cocoa trade

There’s some truly retarded nonsense going around (even for trend followers) especially about the one manager who beat everyone this month

Let's wash our brains out with soap
1/

https://twitter.com/therobotjames/status/1775790343457546354

I’m supposed to be on holidays but you pulled me back in

Why am I writing this?

Because you DUMB MOTHERFUCKERS don’t remember what happens EVERY SINGLE FUCKING TIME trend followers get to gloat

2/

@magikarptrades My 2021 xs momo system

>be me
>assets but cashflow broke
>I know, grift out the hole
>charge $1000 to watch me “design a system and trade it” over 12 zoom calls
>punters kicked in 40K to watch fuck it do it live

1/ @magikarptrades It was obvious crypto was so roundly hated that it was a smart bet

Took Andreas Clenows system from “stocks on the move” and modified it for brypto

2/