Funding rates are a hot topic again

I wrote a detailed article about funding, open interest, liquidations, and CVD a few months ago

I think it's a decent piece

medium.com/@cryptocreddy/…

Trading should be boring.

You should know what you're looking for, how to execute the idea, and how to manage it.

The majority of the time is spent waiting - doing nothing when there's no trade, and doing very little whilst letting the trade play out in most cases.

If you have

Hindsight risk management post
Vacuous trading psychology post
Vague bullpost about surviving before real bull run
Hindsight did you buy the dip post on green day

Queue 'em up

Maybe it’s the fever speaking, but am I an idiot for not doing ‘KOL’ angel rounds?

My reasoning is some combination of:

1. I’m probably not smart or experienced enough to materially add value in any technical way.

2. Projects that have a large or predominantly KOL investor

How most of us will lose money:

Comfy portfolio ATH

Buy yet another breakout (why not, it has worked every time)

Breakout fails, you’re down 10%

Whatever, buy the higher low

No higher low, range breaks down

Down 40%, Europeans are posting Tetris charts again

Good breakout trades:

1. Trade the breakout as early as possible. Add most/all of your size as close to the breakout as you can. Maximises proximity to invalidation and you’ll know if you’re wrong quickly.

2. Trade the mini/LTF consolidation after the breakout. Add most/all

Volatility. Your open positions disappear before your very eyes.

You avoid looking at your fill prices.

Checking your new, reduced account balance is a non-starter.

You feel like you should trade, but can’t bring yourself to risk another loss. The defeat is all too recent.

The silent trading ‘losses’

Undersizing winners
Oversizing losers
Partial fills
Missed trades
Pulling orders
Closing early
Closing break even
Closing before the move
Rotating from strong to weak

Trading isn’t always sexy

GM

Remember to get bored & complacent during low volatility

Only to complain about how the market is moving too quickly during high volatility & that you're waiting for a pullback

As a result, you'll be consistently frustrated in all market conditions at your inaction

🌞

You will not make serious money only ever betting 0.5%-2% per trade

Most trades are equity curve noise

If you want to make a dent, you need to swing for the fences when there's a great opportunity

Risk management isn't what makes money - it keeps you alive between big winners

The opportunity cost of learning to trade (vs deploying) in a bull market is too high.

Bear markets teach bad lessons & give you 'PTSD' (low risk appetite, inability to hold, distrust of breakouts/trends).

That's why it usually takes at least 1 full cycle to gain competence.

Narratives are mostly made up.

They're usually some combination of:

1. Groups of speculators buying something early and talking their book

2. Outlier price performance in an asset/group, narrative gets attached after the fact to 'explain' price action

Don't drown in fake FA.

$BTC

GM

A few common mistakes in these conditions:

1. Excessive leverage. Specifically, introducing liquidation risk in assets that are regularly moving 10%-20%+ in a day. Let the volatility do the heavy lifting, not the leverage (or specifically, massively inflated position sizes

Always use leverage.

Use it everywhere - no exceptions.

Funding is high, but I’m getting 5:1 in the shower.

Study capital efficiency.

On Adjusting to Trending Conditions

Some qualifiers before the main content:

1. There's never a good time to post this stuff. People love to infer that any post is some form of market commentary or hidden directional 'signal'. It is not, just take it for what it is.

2. There

First cycle participants make money because they're open-minded, optimistic, and think 'What if I'm right?' instead of 'What if I'm wrong?'

They lose most of their gains for the same reasons

Navigating cycles requires switching between childlike idealism and sagely cynicism

I look forward to the hindsight posts that will populate my feed in the near future

Avoid the extremes: being all-in or having 0 crypto

If you're all-in and the market dips, you can't take advantage of great entries

If you have 0 crypto and the market rips, it'll start messing with your mind and you might become European

Even 1-5% cash/crypto (from 0%) helps