Why Retail Gets Trapped - Skew on Order Flow, Altcoins, and Crypto Market Structure

Añadido: 2026-05-22

[00:00:05][music] Welcome to a new episode of the Incilico Terminal podcast.

[00:00:19]My guest today is Skuw. Is it is that what you call yourself or like I mean my my username is kind of complicated like where where does it come from?

[00:00:30]Uh, okay. So, the 52K part literally comes from a options bet some massive whale made in like October or November 2020, somewhere late 2020.

[00:00:44]>> Mhm.

[00:00:44]>> U, at the time it was seen as like a astronomically like insane bet, right? And I was like, okay, [ __ ] you know, interesting.

[00:00:56]>> Yeah. Yeah.

[00:00:56]>> And then it played out like I mean I think the initial top was like 40 something then we went to like the 50s.

[00:01:03]>> So whoever made that and then held it to maturity which I don't even know if uh there was long enough maturity back then but like insane bet in terms of >> price prediction from like 2020 to uh late 2021, right? Crazy. Um that's essentially where the name came from.

[00:01:21]Um, and other than that, uh, I'm pretty uncreative, so I was like, "Fuck it.

[00:01:27]I'll just make it that."

[00:01:28]>> Yeah.

[00:01:28]>> And the skew part is, uh, like options and like Delta related as well.

[00:01:34]>> Mhm.

[00:01:35]>> And since obviously like half half of what I trade with is based or denominated in Delta, which is pretty important.

[00:01:42]>> Mhm.

[00:01:42]>> Um, it Yeah. kind of suits.

[00:01:46]>> I think it's a it's a cool name. I didn't know it came from that, but that's kind of crazy. Like back then, Bitcoin was like below 20K or something.

[00:01:54]>> Yeah, >> it was trading uh between 10 and 12K.

[00:01:59]>> We kind of had like that that bar like the classic 2019 bar, which is basically price goes up, goes sideways for like >> 6 hours, and then just like plunges >> and like, you know, all the degenerate long traders back then would like ape in at the top, then they'd get wrecked at the bottom. Um, and then like after that we like actually did the Parabola to >> 42,000 or something like that, >> which at the time was like crazy.

[00:02:30]>> Yeah.

[00:02:32]Would be would be like terror terror now nowadays to go back to 40k.

[00:02:36]>> See how far we've come in in the space since then.

[00:02:41]>> Yeah. It's it's kind of crazy. I mean, I've been here since like proactively since early 2019.

[00:02:48]>> Mhm.

[00:02:49]>> Um I think like most people probably know of that is around the period of time that I started trading or at least dabbling with the uh I think it was the Quattro contracts through BitMX.

[00:03:03]uh back before everything was KYC, the the good old, you know, like wild west days of people slinging hundreds of Bitcoin, not knowing that, you know, Bitcoin was actually going to go to 100K one day.

[00:03:17]>> Uh even though everyone still kind of presumed it would, you know.

[00:03:23]>> Um yeah. Yeah. I mean, I actually looked at Trapfire like initially to be honest.

[00:03:30]>> Like, you know, you hear from like the boomers all the time. uh and like most professional traders you start with like well trading investing there's the investing which is you know ETFs that's the >> the whole normie path right uh or you know you buy tech stocks essentially that that that's been like the whole investing play game of probably 10 years uh easily by now um and then the trading is typically through like some brokerage which typically uses like you know futures contracts uh and then like, you know, figuring out its futures, it's like, oh, that's kind of cool. Um, and then having known uh most people actually don't know this, but I've known of Bitcoin since about 2012, 2013, um, which is when it was trading >> like unironically.

[00:04:18]Um, I was shilling >> I don't think anyone knows the story actually now think about it, but I I was shilling Bitcoin to people in my IT class. Mhm.

[00:04:28]>> Uh when I was 16 or 17 and Bitcoin was like 150 200 bucks I think.

[00:04:37]>> Mhm.

[00:04:37]>> And I was like I think this is probably going to go up a lot. You should just buy some essentially. Uh and like obviously back then um like a lot of my friends a lot of I think teenagers of that period were very very big into like CSGO skins and like the whole gambling of CSGO skins and crates >> and all that [ __ ] So quite a lot of them did actually buy it, which is kind of nuts cuz if you put like a,000 bucks into uh BTC back then, you you would have got like quite a lot like decent amount.

[00:05:08]>> Uh especially today where it would be worth like easily mid6 fig potential seven figs.

[00:05:14]>> I mean if you held >> Yeah. Yeah. Yeah. Yeah. Um Yeah. Nuts.

[00:05:19]Nuts.

[00:05:21]So you already went into bit Bitcoin back then like as an investor at that age or or just like sold as investment and bought some.

[00:05:31]>> Well, okay, I did technically. I was also mining which a lot of people don't actually know as well at the time.

[00:05:38]>> Um and I think I lost the Tana BTC through some kind of hack as well. I forget exactly what it was.

[00:05:45]>> Uh but it was some like wallet provider.

[00:05:48]Um I think like the the package uh someone injected like malicious um some kind of malicious stuff into it.

[00:05:57]>> Uh and it like drained everyone. Uh it was like one of the it happened to Nice House as well of like 2014 or 2015 something like that. Uh at the time they lost a ton of Bitcoin as well which would all be worth a [ __ ] ton today.

[00:06:12]>> Yeah.

[00:06:13]>> Um but I wasn't like too big into it. Uh I mean at the time like my whole prospect on the future and such was essentially going to like cyber security and >> uh specializing in what would well what's I don't know if it's still called it today but like red team blue team like red team is essentially your whole goal is to uh figure out ways to broke into like a company's infrastructure >> but one one is like attacker and the other is defender basically right kind of Yes. Yeah. Yeah. So, red team is attack. Uh, blue team's defend essentially.

[00:06:49]>> Um, yeah. So, that was like the whole prospect. Uh, and then and then I did that for like a couple years. Um, like working in tech and such.

[00:06:57]>> Mhm.

[00:06:58]>> Uh, got bored pretty quick and I started looking at like different venues. Uh, and then yeah, one thing to another led me to BitMX.

[00:07:07]>> Mhm.

[00:07:07]>> Uh, I think as well like personality, culture, also uh sort of the world I somewhat lived in. uh made it quite easy to um get familiarized I guess with crypto as a whole.

[00:07:24]>> Um yeah, so I mean it was a pretty easy transition. I mean actually technically one of the >> I I' I'd have to dig up the paper that I wrote actually, but in 2017 I wrote a paper about cryptography actually.

[00:07:38]>> Oh wow. Uh, and it was I was actually looking at I think Monero at the time.

[00:07:44]>> Mhm.

[00:07:44]>> Something I I forget actually, but basically cryptography. So I knew like the inf the um architecture quite well.

[00:07:51]>> Mhm.

[00:07:52]>> Of Bitcoin. Um and uh obviously by the time of 2019 you had ETH um because obviously they ICO I think like two years before >> um and ETH was becoming like quite a big thing. And then there was um also D5 protocols which were building the initial rails for the D5 sama. Um but also kind of funny uh because DeFi summer was also kicked off through things. I think it was like yams, the whole like food based DeFi summer thing like sushi >> and all the rest they they all did it food based and it's very very typical of crypto because it's it it initially starts with just pure speculation >> like pure speculation of like the vertical upside of like this random thing right and then being able to capitalize on that. Um yeah I mean that's that's OG OG crypto I'd say. uh very very different today when you have um protocols like you know um Hyperliquid and other like massive names of the time which have built >> um actual like you know uh business empires and such >> and you know the whole abstracting of um friction points with like crypto apps kind of crazy actually to see where crypto's come >> in my personal experience the past like seven years >> what did your trading look like when you first started out like on BitMX back then?

[00:09:24]>> Oh man, I I went down like the typical route. I had like some understanding of um >> of trading.

[00:09:32]Um I mean I you know I knew what like charts were, candlesticks, stuff like that. Like I uh not sure if you had but on the like old iPhones um you could go on they had like the the stock app which was like the old black and white >> where it had like the stock thing on it.

[00:09:51]I forget exactly but you could click on it and you'd see like a very generic >> uh chart right and that like always fascinated me maybe for the pattern recognition part. [snorts] Um, so I was already familiar and then uh obviously everyone used Trading View.

[00:10:10]Um, so I made, you know, Trading View account. I was like, you know, there there's so many indicators. What the [ __ ] do I use? You know, so much [ __ ] right? So I go on like YouTube, try to familiarize myself with like uh different types of trading.

[00:10:25]>> Uh, I mean, I tried, you know, the different like lines, the meme lines.

[00:10:30]You call them meme lines if you want, but you know, horizontal lines, vertical lines, the blah blah blah. I tried that and the whole diagonal like, you know, sometimes it works, but there's a whole lot of like whatifs, maybe. Yeah.

[00:10:45]>> Uh it's it's very speculative. I didn't personally really like that other than I think higher time frame uh levels like higher time frame levels where price uh tends to gravitate to it. So like you'll see price like bounce off it or reject it you know a lot of times over uh days, weeks uh even months. Uh those levels are very important because they they fuel breakdowns and breakouts right so that was >> uh my initial I guess start of strategizing trading and building a trading psychology around that to understanding price action.

[00:11:24]Um, in hindsight, the first thing you do want to learn is definitely price action.

[00:11:29]>> Mhm.

[00:11:30]>> Uh, and like structure and trends rather than diving into just random indicators and [ __ ] and like trying to strategize it.

[00:11:38]>> Um, I I mean I wish I did that initially.

[00:11:42]>> Price action is like stuff like market structure, right? Like higher lows.

[00:11:46]>> Yes.

[00:11:47]>> Lower highs.

[00:11:47]>> Yeah. Yeah. Well, I technically Yes.

[00:11:50]Technically that that's like trend in my opinion. like higher highs, higher lows, like uptrend, right? [clears throat] >> Um and and then the different types of like, you know, what a certain candle means like a dogey.

[00:12:02]>> Um the certain kinds of like wicks that you get and why it happens, which is typically, you know, like you get a massive wick through level and then price instantly reverses. And that would >> for a lot of like early traders, they get liquidated pretty easy on these moves cuz they either get swept out or they trade into it into like a key level like a key demand or supply in the market and they're like, "Yeah, it's going to it's going to move this certain way and then it doesn't and then they're like, "Oh shit." And then they double down on it >> and then they blow up an entire account, right? So I think yeah learning these nuances when it comes to price action uh is extremely important extremely valuable um and then after that you can then strategize which would be systematic trading and that's [clears throat] where you build a long-term reliable system which in all regimes of markets um works with price action gives you confluence >> you know reasons to be in a trade uh rather than just like general noise.

[00:13:10]Um you want as much like confluence and absolence as possible. So like you want to be absolute >> in terms of being like long or short, right?

[00:13:20]>> So that that is like moving averages.

[00:13:23]Fantastic. Uh and the cool thing is over the past uh let's say 10 years uh most algorithms typically use like VWOPS or some kind of moving average >> which makes it like very respected.

[00:13:38]Um yeah I mean highly recommend systematic trading. Um and then like obviously on top of that um moving averages with like a momentum indicator of some kind. Then that gives you you know the the three confluence factors like one price action and and your key level on price is trading around that. Uh does does the market have enough momentum?

[00:14:04]Uh you know is is you know on like lower time frame structure uh is is the market trading uh moving averages uh with trend with like the higher time frame trend >> and all these things like mount up to your confluence of a breakout or a breakdown.

[00:14:21]Uh and you know being able to add these together and then uh actually take action can uh can be very like rewarding honestly uh even as like simple as it sounds.

[00:14:35]>> How long did it take you to get like a good understanding of all of these things or like a good grasp on them the the mechanics >> I think. Okay. So like the basics like price action levels um probably like 3 to 6 months.

[00:14:54]>> Mhm.

[00:14:54]>> If not like somewhat instantly. I won't say completely instantly because you're always learning in terms of like how price reacts or something because there's a [ __ ] ton of like fake outs in the market >> like a ton like all the time left, right, center. Um, on top of that as well, like without how I trade now, I understand uh at like a very deep granular level of of why the market is actually trading or reacting in certain ways.

[00:15:23]>> Mhm.

[00:15:24]>> And that often, you know, leads me to realize that there's a ton of traps in the market and it's it's more of a liquidity game now.

[00:15:34]>> Mhm.

[00:15:35]>> Um, obviously hindsight as well with that. Um but >> what do you mean by traps?

[00:15:42]>> Uh like a a typical trap on the market at least today is um you'll have like a a very liquid area in the market which is typically you know called like demand or supply. That's essentially where price raised into a highly liquid area.

[00:15:58]>> Um and this is the most opportune time for big buyers to show up or big sellers, right? So that's why you get those massive like rejections or like massive vertical moves depending on what's going on. Like narratives are extremely important >> in uh crypto. Without a lot of narratives, you don't really get price uh movement to be honest. You usually get chop.

[00:16:22]>> Um which is kind of funny cuz uh you'd assume for like a mature asset, they'd be able to trend natively by themselves, but they they they still need narratives. they still need to encourage buyers or sellers to do something.

[00:16:38]>> Um yeah, so a trap is essentially the market looks really good at a certain area or really really bad but if you look at a granular level >> you see that you know there are massive massive players that are taking the other end of the trade. Uh so that that that gets nicknamed the traps. Like uh take yesterday for example.

[00:17:01]Uh the market was essentially being pushed up by like one probably one person, one firm just aping [clears throat] into a bunch of longs which was able to >> move price during typically a liquid hours which is uh the the end of a weekend like a Sunday.

[00:17:19]>> Mhm. into futures open which goes into typically like a a weekly open and typically the the reason why they do that is to convince the market of something.

[00:17:30]>> So then it sort of becomes kind of like poker, right? You have like a poker face. They have that poker face of uh convincing the market to buy, right? Um and a lot of people started buying actually and they essentially use that liquidity, right, to sell a [ __ ] ton of Bitcoin.

[00:17:47]>> Mhm. Uh, and that's why you saw a more not typical rejection, but like a quote unquote rejection, which is essentially one player move price, manipulated the market higher, sold into the market or the the new buyers, uh, and then that was their trade, and then they basically, you know, they they they [ __ ] off or leave, right? The market has to figure out what's what's actually going to happen next. So, so basically they're like in a in a long position or there like holding spot bitcoin or whatever from maybe earlier lower prices and then they use liquidity of the of the weekend to like >> push the the market because it's like takes less amount of money to do that during illquid times and then they sell to people when it's like more liquid and they got like basically baited into buying at these higher prices by these players that wanted to offload from earlier.

[00:18:40]>> Yes. Yes. Yes. Um yeah, it's it's today it's a liquidity game market.

[00:18:47]>> Mhm.

[00:18:48]>> Um I mean realizing that's pretty important I think because >> how is how is that different from uh from back then? Like how did that change?

[00:18:56]>> Well the market back then ironically was more organic but it was very illquid at the same time.

[00:19:02]>> Mhm.

[00:19:03]>> Um like take how Bitcoin traded during I think 2019 was very it was pretty pretty organic. So you had like the massive blowoff for 2018, right? From 20K down to like what was it? SixK, three or six, some I actually forgot.

[00:19:21]>> Uh but then essentially you had essentially no movement after the the the price crashed essentially.

[00:19:29]>> Um and then you had a gradual then pretty rampant move as Bitcoin does from one extreme to another extreme.

[00:19:40]uh and typically during these these these changes in the market it attracts a lot of attention.

[00:19:45]>> Mhm.

[00:19:46]>> Uh and the interesting thing was back then is uh it attracted more capital shops which were then set up to actually I think trade bitcoin with proper risk management. Right.

[00:19:58]>> Mhm.

[00:19:58]>> Uh same same as market making as well.

[00:20:02]uh like I think market makers back then dominated quite a quite a lot of um like the OI as well as like volumes and stuff like that.

[00:20:11]>> Uh but the retail audience grew like exponentially from 2019 up to 2021. That's that's why like Bybit did extremely well >> because they they timed their entry to the market um very very well. like quartz >> uh like the largest bull run well the largest like retail driven bull run ever >> uh which is essentially 2019 to 2021.

[00:20:37]>> Yeah.

[00:20:41]>> And then um Yeah. And then like basically after 2021 has become a lot more institutionalized.

[00:20:49]>> Mhm. I mean, ironically, like all the institutions that jumped in uh during like probably 2021 mostly, uh a ton of them blew up, got wrecked.

[00:20:59]Typical crypto style, right?

[00:21:01]>> Uh the ones that survived then entered more from 2023 onwards and a lot of those shops had more altcoin exposure.

[00:21:13]Uh because like the the hidden secret is the generational wealth in terms of multiples is made off uh certain certain altcoins which have a good runway.

[00:21:24]>> Mhm.

[00:21:25]>> Uh like you know they've raised capital they have like two years they're building something exponential which has fee generation uh tracks you know daily active users kind of thing. So it has very obvious vertical upside for the token itself.

[00:21:40]>> Yeah. Um, take like hype today. That's why a lot of investment is piling into hype u all the time really. Um, and that's that's kind of why it maintains its value.

[00:21:52]>> Mhm.

[00:21:52]>> It may have not gone up exponentially yet like BNB kind of uh style. Um, but that's essentially what like crypto's at.

[00:22:03]And what is like uh the difference nowadays if you say like is is that something that didn't happen back then like uh what you just described uh like this weekend price action where someone just like pushed the price a bit higher and then like tried to like uh or did offload into other buyers by like abusing the liquidity or was that maybe something that happened like uh every day back then because it was like every day a lot less liquid than it is now.

[00:22:31]It it did happen, but it definitely wasn't as frequent, I think.

[00:22:36]>> I mean, I think today a lot of price actions dominated by probably more high frequency systems. So, in in a way, like, yes, in institutionalization of Bitcoin made our coins go up and everything like that. So, that's like the quote unquote blessing.

[00:22:55]However, however, right, >> the the dark side of that is it became extremely competitive. Now, so >> if these very very smart like quantitative firms um which more often can easily reverse engineer people's positioning from data >> u they can basically work out where they can get a liquidity grab in the market and they'll do it obviously because it's uh profitable to do so. Mhm.

[00:23:22]>> Uh whereas like back then um I think the I mean yeah it's it's historically very profitable to do that. It's been shown to try but back then participant wise the pool was extremely small compared to now.

[00:23:36]>> I see.

[00:23:38]>> Yeah.

[00:23:40]It's just it's business as they say.

[00:23:43]>> What what does what does your trading look like nowadays? What sorts of stuff do you do you look at to enter a trade?

[00:23:49]What sort of time frame do you trade over?

[00:23:52]What tickers do you trade?

[00:23:56]>> Honestly, it really depends on on the market at the time. So, if if the market is >> early early like bull trend, uptrend, right? I'll be looking a ton I spend a ton of time at like screening sectors of the market. So seeing what what coins and tokens have relative strength to Bitcoin, ETH, Salana um bas basically like you know actual sector trading which is pinning tokens against their their major token um and then essentially looking to trade the obvious easy uh momentum couches.

[00:24:31]>> Mhm. because because obviously on those moves you can you can uh materialize like easy 2004 400% gain on like 10x leverage. It's like two to 4x. Uh that's a extremely easy way to um like grow your account like just uh by doing like nothing essentially. Um but the the the nuance with that is we we make the assumption that massive buyers are going to come buy everything, right? which >> Mhm.

[00:25:00]>> these massive buyers all use algorithms, right?

[00:25:05]And me knowing that uh pushes me more into like orderflow trading which is specifically using >> um like you know Kaka being one which is essentially where I can see the the actual liquidity specifically I can see price trades into that. I can see the delta the volume traded there the imbalance too. So I can see if there is >> a passive buyer or like iceberg uh buy or sell which is essentially uh with with iceberg buyers sells price goes sideways and then just like makes a massive move >> and typically during that you'll see uh like divergences which is like you know CVD goes down a lot or a lot up a lot but like prices uh basically no momentum momentum dies right and then goes the opposite direction. um there's some like really really fantastic trades in that on like a lower time frame for like a scalp. Um but like for like swings not really that important. Um unless that is a um a kind of end of trend move like take take the the move from like November of the election like 2024, right? Uh then we, you know, we basically went vertical off that that narrative, right?

[00:26:25]And then >> we sort of grinded higher for a while, but we had a lot of like momentum being lost um clearly over higher time frame and then we had that big pullback.

[00:26:37]Um and then that was like the reset essentially.

[00:26:40]>> Mhm.

[00:26:41]>> But it didn't change like the higher time frame structure or or trend. Um so yeah I mean a lot of my trend my a lot of my trading is trend based today uh momentum based like fundamentally right um and then on top I use systematic trading like what I what I mentioned earlier like I use um RSI as a good filter for like momentum like above 50 is like shows momentum but you know does it >> uh does it have the right elements which is like does it have you know true organic buying at a price or is this just, you know, one buyer moving price up?

[00:27:19]>> If it's just like one buyer moving price up, that's an opportunity to, you know, ride it until they're not buying, like, you know, seller. Uh, and then you short it basically.

[00:27:28]>> Um, so I I I would say like the long-term kind of focus is maintaining the the annual like yield I want, which is basically like maintaining my my my monthly or like quarterly return by Uh essentially whenever there's like a [ __ ] move in the market obviously I'm going to take advantage of that um because I mean why not serious on the game in the end it's uh you verse the massive trading firm which is >> obviously uh going to prioritize their profits so you might as well do the same >> which I mean I I will say to be honest that that's probably solely driven the increasing like toxic flow in the market which essentially means you have like one massive trading firm which is trying to move the whole market >> and then you get a second firm that comes in a piggybacks off it.

[00:28:28]>> Then you get like a larger like a way bigger firm that's just like haha [ __ ] you and then like >> dumps on them and like aims to liquidate them.

[00:28:38]>> Um they they won't like randomly do it.

[00:28:42]It's it's all very strategically done.

[00:28:45]>> Mhm.

[00:28:46]>> Like take FOMC if they know the outcome to a certain probability.

[00:28:50]>> Yeah.

[00:28:50]>> You already know they're going to target liquidations in the market >> because liquidations essentially generates uh volume and it also generates uh liquidity.

[00:29:01]So they they are typically the creators of liquid liquidation moves in the market, right?

[00:29:07]>> U but they're also the big buyers of it too or the big sellers. So they are the the large entity that is um over time actually moving the market >> and you're looking at like uh CVD and and other autoflow stuff to like basically piggyback onto that.

[00:29:26]>> Uh yes yes yes. Um I mean I will say like two two general indicators which a lot of people yap and yap about but don't don't know how to utilize is like OI and funding.

[00:29:44]>> Mhm.

[00:29:44]>> Right. So like the funding rate um is not like an instance true value.

[00:29:52]Right.

[00:29:54]uh it'll change over the the period of those 8 hours essentially, right? And then it resets >> at at the the rate the average rate of the past 8 hours, right?

[00:30:05]>> Um and then there's OI, right? So if you if you get like a lot of like shorting of the previous period, OI in the next period is going to like become negative.

[00:30:15]But but if you see that uh exit >> Yes. Yes. Yes. Yes. the funding rate.

[00:30:21]funny, right? Um, yeah, it's it's kind of me. So, it's like it's useful but delayed.

[00:30:29]>> So, the way to use it is by looking at the direct positioning itself on the market calculated in rough terms of delta.

[00:30:37]So, like >> if there's a ton of shorting, there's there's typically a negative delta to that.

[00:30:43]>> Mhm.

[00:30:44]>> But it should show up in funding rate layer later, which is basically negative rates or lower rates. Mhm.

[00:30:49]>> Um then if you use like footprint and uh well yeah mainly footprint uh you can basically see it essentially um like if they're shorting into market it'll be like negative negative delta. Uh if they're passively doing it which is through limits um you get a pretty consistent same value like like 2 million 2 million 2 million like positive delta >> which literally just shows you that they're just like shorting at this price. that's their average price and they're scaling, right? Um, extremely useful to know because you you can catch moves before they even start just by seeing that.

[00:31:27]>> Just by seeing like the the massive players position into something gives you a time a time window of I don't know like >> minutes to hours sometimes to basically position. Um, and it's extremely obvious on like altcoins. Like if you go look at like Zcash, you can literally see like one whale or group of whales that are moving the price like 10, 20, 50%.

[00:31:51][clears throat] >> Like you know, just here and there essentially.

[00:31:55]>> Does um the most of the dexes I think have their funding rate uh every hour instead of every eight hours? Is there like a change of dynamic in that that you can like see the effect sooner than on centralized exchanges?

[00:32:10]Um, definitely definitely but but also I think it makes it more noisy.

[00:32:14]>> Like I primarily use Binance's data um because I think it's the least noisy but also most like massive MMs and firms trade primarily through like Binance.

[00:32:29]>> Mhm.

[00:32:30]>> Um Coinbase sort of they they actually use the institutional which is like a different book.

[00:32:37]Um, and then and then like Hyperlquid more now. Um, but a lot of like the data that you get from like Hyperlquid is uh I mean it's kind of funny. It reminds me a ton of the early days of using like a software called Bookmap.

[00:32:51]>> Mhm.

[00:32:52]>> Which is basically like a really old uh heat map tool and you could see like you know the the XPTt USD chart uh and you basically just see like random Dens just like yellowing in the price all the time.

[00:33:06]So it it kind of like it's funny to look at but it's not like really objectively that useful >> uh unless you do like massive uh filtering which some people do that through like uh CVDs which is you filter by a certain uh size which is like you know 100k 1 mil 5 mil or at market or sold at market.

[00:33:29]>> Mhm. And then you like compare that to price action which um you you can use it to trade like momentum which is typically driven by like you know market buying or selling or on the off hand off the in the off hand you can see uh what I call absorption in the market which is >> um a lot of volume and a lot of delta traded at a level right but it's not driven by a market participant it's actually a passive seller or buyer essentially gobbling up everything Um, and then that that's like single-handedly the the number one ender of trends.

[00:34:05]>> Mhm.

[00:34:05]>> Is you get this massive participant that's like, "All right, yeah, this this move's gone on long enough or I think this is too val too too expensive or discounted and then they they they essentially, you know, um, start deploying or selling, you know, start deploying capital or selling their their inventory."

[00:34:25]when looking at all this stuff like what are some uh mistakes that people maybe make or some like misconceptions that they have if they're not um as sophisticated or what I I don't I don't know what the better word is. So if they're not as familiar with these tools, what are some misconceptions that they like have when they're trying to use them as someone that is like quite proficient at using them as yourself?

[00:34:50]Uh I I think as simple as it is they they take it as absolute like at face value >> like and this is a common mentality actually >> and I know why it's because a lot of people see an indicator right like RSI uh moving averages a lot of the Encilico ones which are like very good but a lot of people don't know how to use them.

[00:35:13]>> Mhm.

[00:35:14]>> Uh they just kind of take it as like face value face value. um and they don't really have a understanding of um I think how to trade professionally which which essentially just means how how to actually trade rather than just speculating.

[00:35:29]>> Mhm.

[00:35:30]>> Cuz if you're speculating and you you're using all these tools in the end, you're not using them to their full advantage, right? You're not you're not really gaining an edge in the market. Um yeah, I mean it's as simple as that. I think like number one, the mentality, right? are they there to speculate and make an easy buck like quoteunquote obviously it's more difficult than that.

[00:35:52]Um >> unless you time the market really well and you just want to like yolo on something that you think goes up or down right. Uh and then second point um actually researching what's uh what what like you know RSA is what what CBD is what what delta is what uh buy or sell volume is. So you actually have to um study and you know train your understanding and then test.

[00:36:20]>> Mhm.

[00:36:21]>> Uh definitely test before you you utilize anything in in the actual uh real terms of trading like real money.

[00:36:30]>> What what is the difference between speculating and real trading?

[00:36:34]>> Uh speculation is essentially you don't have a plan or a strategy in my opinion.

[00:36:39]You're basically like you know this this chart >> quotequote looks good or you think uh this narrative or agenda is going to be good or bad for the the token and you trade solely off that right actual trading uh essentially means you know like I said before you you have certain parameters certain like rules as well so you have like your checklist like you know mine is I check price action I check structure I check uh the the trend I Correct. I check uh my systematic uh confirmations which is uh trend falling indicators essentially. Uh and then on top of that I I I check you know the the the other side which is uh you know am I just being um led like cattle to a slaughter. Right.

[00:37:26]>> Mhm.

[00:37:27]>> Which is essentially the orderflow part.

[00:37:29]that that's like my final confirmation that there is true buying or selling or true organic momentum that is building.

[00:37:38]>> So it's it's kind of like in the end the utilizing market data is the truest form of trading >> because you can see specifically who's buying what, how much, where they're buying. Um and then you can connect all the dots. You know, are they are they buying off news? Are they buying off speculative narrative? Mhm.

[00:37:59]>> Uh is this speculative narrative um potentially profitable in terms of offside? Uh like you know so on so forth. It should snowball into a very concise solid uh trade.

[00:38:15]>> Consult the market about the market.

[00:38:18]>> Yes. Yes. Yes. Uh I mean if you're going to trade against the market that's a that's a whole different degree of uh expertise I think.

[00:38:25]>> Mhm.

[00:38:27]I I want to ask a bit more about the how you mentioned earlier that um I guess as obviously almost everyone knows the most returns are in in like altcoins and they're multiples and then you talked about how you scan the different sectors to find the proper coins to to long pretty much. And I want to ask a bit more about how like what exactly you look out there for to like find the the correct coins and not be like stuck in some random thing that won't go up with the rest of the market.

[00:39:01]I mean pretty good question. It it also depends like new tokens I think are harder because it's more speculative, right?

[00:39:08]>> There's not really that historical um data that you can use. So that that I think is more narrative based trading.

[00:39:18]Um >> typically when I trade that I actually have like a trailing uh stop-loss which is based off like a like a VW wall. Uh so essentially I can I can capture the upside of the move um and then like you know when it eventually reverses I just get stopped out and profit and then I essentially just move on and and like don't give a [ __ ] for >> I don't know a certain period of time cuz like obviously each token each new token has its like >> uh time period where it goes up right it trends uh and then there's usually unlocks and various other factors which act as uh supply.

[00:39:55]>> Mhm. Um and then and then obviously the the asset will go back to its equilibrium and then you can trade the second uh move of that which is you know it goes up again sometimes higher sometimes not um but beyond that I then go through like you can do it with AI now um like I'm working with uh like you know like star child true north um and >> um essentially the in the And I'm going to get both to um optimize in terms of providing I think true um how how do I call it like quick uh trading solutions I guess which would be like say you have a scanner right uh most do it backed in like Bitcoin ETH and US dollar right >> but in actuality um there's so many tokens you have like massive token dilution now like too many tokens.

[00:40:56]>> There's too much [ __ ] to watch and it's very difficult to siph through it all based on right to even like start.

[00:41:02]>> Um so what I would do is you identify your sector of interest. So like you could I don't know just type an AI like >> um sectors that have or sectors and tokens that have performed better than Bitcoin in the past 30 60 90 days kind of thing, right?

[00:41:20]You start with that and then you go from that to the charts and you essentially look for uh tokens which have reclaimed key higher time frame levels like the like one week lows is very important or they've made a higher high on like a one week or a one day basis. Um on the one day it's typically more initial like uh the transition be from a higher time frame like down or uptrend to next the next higher time frame trend. Um so that that's usually the best time to get positioned because you can catch the the bulk of the move, right?

[00:41:58]Um and you know how I basically signify a trade from that is then you know has it reclaimed like 4 hour uh 50 or 4 hour 200 EMAs or um well I use 4 hour on the one day typically and if it's if it's reclaim both then that's like yeah I'm in essentially.

[00:42:22]How much uh size do you put into a coin or how do you decide how to size?

[00:42:28]>> That depends on if I'm early or not. So if I'm early, I can scale essentially over time.

[00:42:37]Um so that I mean I've been asked this like you know some people use like nominal position amounts.

[00:42:43]>> Mhm.

[00:42:44]>> Um some use like a percentage portfolio.

[00:42:46]Uh I I I my like if I'm trying to catch for example a massive trend like a start of a higher time frame trend right I I'll do the sector thing and I I'll pick my my um my coins which I think will perform worst or best in terms of you know being like net short net long right um I will pick those and then I will scale so I'm like 1 to 5% % total portfolio in like each uh like early on uh and then like basically over time my portfolio is like 50% like alts >> and then the the rest will be 50% uh BTC typically.

[00:43:30]>> Mhm. because I I basically want to capture the upside that's typically always driven by Bitcoin initially, but on top I want to catch the you know the the two to 5x or 10x which is driven by all these other these other tokens. So that 50% can become like a you know return of like 25 50x on my total overall like portfolio.

[00:43:54]>> Mhm. Uh but I will say do not do that if you are new to trading because it is a royal pain in the ass to manage the amount of risk associated with that.

[00:44:03]>> It's it's very degenerate. Uh but if you know what you're doing in the end uh like for instance um if some of them are like um on the verge of at least like on the verge of like risk which is basically uh like they've lost their gains. They're going negative.

[00:44:24]>> Mhm. And if I know it's a certain pullback in the market which is off newsbased, I will cut a [ __ ] ton of exposure, evaluate uh and then like uh I either cut completely or I double down. It it really, you know, depends basically on how the overall markets uh move. Um and and and actually with that um like war as a whole isn't interesting when it comes to trading to be honest >> because at the same time initially uh it's like massive risk. If you have margin in the market and trade fire firms hate two things risk volatility so if you see an increase of both they they tend to [ __ ] themselves right that in itself can become an opportunity but I think a lot of people don't know how to time that that that time horizon right >> um yeah that's that's that's an interesting one actually because with like the time horizon uh you need to know how much capital you're deploying, what kind of return you expect, what kind of return you need to uh sustainably make a profit, and if you sustained any kind of loss, right, how do you make that back?

[00:45:42]>> Mhm. Um, and I mean one of the quickest ways to make it back is, you know, full like lock on lock in mode. Uh, and like trading the the, uh, trenches, which is essentially just like scalp trading like a demon, right? You just like lock in it. It's ridiculous. So, it's very timeconuming. It's like, you know, >> anywhere between like >> like 5 and 10 hours a day of just like raw, you know, five men like literally one minute or five minute shot just like scalping stupid size.

[00:46:16]Um, also would not recommend that if you're a retail trader.

[00:46:21]>> Is is is that what you do when there's like uh when there's no trend? I wanted to ask it earlier because like you you talked about trend trading mostly, but most of the time the markets are ranging. So is that like what you do when the market is ranging?

[00:46:35]>> Uh when they're ranging honestly um yeah I mean it's pretty simple just trade the range. So like you basically define it you see uh where price has reacted certain amount of times um there's always like in these ranges like a couple times where they like blow out which is basically like price extends a little better than usual and it targets all that trend all that like uh range uh positioning.

[00:47:01]>> Mhm.

[00:47:02]>> Um hence why you get like the whole sweep. It's pretty thin.

[00:47:06]uh then reverses in like literally five minutes or something like that, right?

[00:47:10]Uh short moves like that, like really sharp moves, some of the best shorts like ever or like longs.

[00:47:16]>> Um I think probably shorts as of recently because >> uh I think since like October that that one like wipe out and like alts on Binance through that exploit I think spoke a [ __ ] ton of uh people and MM. So then like you haven't seen the same response to the long side.

[00:47:36]Uh I mean I would say it's kind of returned as of like recently with like a lot of these lower time frame lows. Like it seems like you have that proactive buyer again. I don't >> it usually happens though like when when there's like a big uh leverage wipe out.

[00:47:51]I mean 10 10 was obviously like kind of special but uh even before when when there's like this exuberance in the market and then um there's like this one day where like majority of participants get wiped out everyone is kind of like scared for like a couple of months or something to really get back in there again and we have like this reset and then like slowly it's like basically this this market psychology chart a bit you know where it's like >> yeah yeah >> hope or like denial hope whatever and then like >> I don't know what the next steps are but where it like goes up and people come again and stuff like that.

[00:48:24]>> Yeah, true, true. I do agree. Speaking on that actually, um being able to trade on like market psychology. So that's like everyone's euphoric. Everyone's very pessimistic, right?

[00:48:37]>> Way more difficult than people think. Uh for one, a lot of people think you could just trade off that. Not true. Mhm.

[00:48:44]>> Uh because if you know if Bitcoin has gone from a high time frame uptrend and is now going into a downtrend and everyone's pessimistic, you know, they're actually probably right on the end, right? And then a lot of people will long way too early and they get wrecked in the initial like down move, like absolutely like wiped out, right?

[00:49:04]>> Mhm. Uh whereas if they just looked at the chart and like literally just went to like a one week and looked at the historical levels uh they would be able to see around about you know where you would expect a massive move from the market like as of like currently um a lot of this this up move is essentially off the highs of 2021.

[00:49:27]Mhm.

[00:49:27]>> Um which which is really like no surprise uh to be honest but uh a lot of people were like really pessimistic at the bottom um or or the bottom low whatever you want to call it right u that was a buying opportunity right but when uh a lot of people were like you know pessimistic earlier right like earlier in the year um that wasn't necessarily like you know you should go out and buy it's it's more like you know evaluate the structure and trend which was you are leaning down and you rather just then, you know, short way overvalued like shitcoins and alts >> uh instead and then just sit on that basically.

[00:50:08]>> I think you could say like it just occurred to me but it's also I guess kind of obvious like um momentum and sentiment are like very correlated in a way where it's like >> you are correct. Yes. with with these rules of like uh like the the new person or whatever will always say like if it's oversold on the RSI then you should buy and if it's overbought then you should sell but but that indicates >> that's one of the funniest waves >> that that indicates that there's like a lot of momentum either to the upside or to the downside and sentiment is kind of the same like when when people say like on these days when there's a 10% down day and there's like a lot of negative sentiment but also lots of negative momentum and it seems very bleak. It seems like it's the bottom, but it's just like there's more fuel to the downside because we're in like a bad time. And it's it's the same on the upside. Like if it's always with people saying like, "Hey, there's like a top signal." Like something very [ __ ] happens on Twitter or something. And then it's like, yo, this is a top signal, which it is, but there's also so much momentum that we still keep going until we get to a point where it's a bit more like momentum is like slowing down.

[00:51:13]there's a bit more consolidation there and then it's like the actual top or like the actual bottom and the sentiment there is also still like kind of euphoric but like or kind of like like sentiment on the recent bottom is like bad and it was very bad but it's like always it can always get worse. You always need to like kind of wait for a sentiment like reset a little bit kind of like the same as you do with the momentum oscillators.

[00:51:37]>> That's true. That's definitely true.

[00:51:38]Like I see the extremities of that which is like people are literally saying like it's over or you know we're going to falhal type [ __ ] Um you want to look at positioning too.

[00:51:52]>> Yeah. Like if if you have like so much degenerate positioning and the market can't actually break through a level that in itself is is right before uh the market reverses every single time >> like it it I I haven't seen that signal change or fade in like >> five years I think.

[00:52:13]>> Yeah.

[00:52:15]that that and that and like it's always driven by something like uh the initial top was the Coinbase um IPO I think.

[00:52:24]>> Yeah. Yeah.

[00:52:25]>> Um yeah, that Yeah. Uh I forget what his name was. Uh [ __ ] there was a really good big trader that called it like to the tea.

[00:52:37]Uh [ __ ] I forget his name. Um but yeah, anyway, there's been like quite a few of those.

[00:52:44]Yeah, he has like a a picture which is like a roller coaster and like the the roller coaster gets smaller, >> isn't it?

[00:52:50]>> No, no, no. Not not rookie.

[00:52:52]>> But didn't he also have that PFP? But who was it?

[00:52:56]>> Actually, I don't know. But you're right. It was it was the same in in like 2017 or so or like 20 Yeah. 20 2017 because like the the top was when the CME futures got released, right?

[00:53:08]>> Yeah. Also [clears throat] convenient that uh all the exchanges aren't down for that. Very convenient.

[00:53:17]>> Yeah.

[00:53:20]>> Classic >> as usual.

[00:53:23]>> Yeah. Oh man, don't don't get started on uh the Binance listings. I mean, it's kind of funny cuz it's it's been on the timeline a lot lately where like >> and it's true. Whenever a token gets listed on Binance, they typically want a large percentage of supply and then they uh they have internal desks and uh they tend to, you know, then sell when they see >> the global uh long percentage of this token above like 60% and they just like sell it on you.

[00:53:51]>> I mean crime crime crime is legal. So >> the the president is probably in support of that. So I guess you can pretty much do whatever you want. But it's good for us to like benefit off that and then we need counterparties and all of that. But yeah, it's it's a bit silly.

[00:54:06]>> Yeah. Yeah. True. True. I I will say like I get bored during range trading.

[00:54:12]So I I like to play the game of chicken with like whatever large MM or like firm is is active. Like I'll like occasionally just kind of like poke the MM and see if they do anything. Uh, and like I find quite often if I do that enough, some algo will come out of nowhere and just like market a stupid amount and then they >> on Bitcoin or like on these random these random [ __ ] coins.

[00:54:38]>> Um, specifically Bitcoin, but you can do it on alts. It's I would say a lot more stupid on alts. I think they tightened a lot of the the profiles after October.

[00:54:48]>> Mhm.

[00:54:49]>> For obvious reasons. Um, but what you could do like before that was uh essentially you could trick these algorithms into buying >> equal to your size essentially because they want to like outbid you to make you buy higher.

[00:55:04]>> They do the same to the downside and then they utilize these liquidity. So it's like a >> it's like a game of hot potato in a way.

[00:55:13]Um, so yeah, I mean you could basically just, you know, manipulate the the algo to buy and then you just like dump on it and you can just do that perpetually like all these [ __ ] coins like when when you see like coins like DWF come to the scene, right? And they they have like a more of directional way of trading as a market maker, which I ain't going to go into the ethics of that or anything like that. Um, if you know, you know. I'll just leave it at that. Uh but yeah, obviously when I come in, it's really obvious and not a surprise in what they can do with a lot of like these low float or high float even like uh shitcoins and als you can move them like a stupid amount.

[00:55:55]>> And then when they attract a ton of uh volume that isn't them because they they they tend to dominate like 85 90% >> of the volume. And then when once it dilutes back to like I don't know like 60 65% they'll just like straight up be like okay time to exit or time to buy.

[00:56:16]>> Yeah.

[00:56:17]>> They don't give a [ __ ] I I I kind of wanted to give like a little bit of [ __ ] diplomatic statement or whatever of being like, "Yeah, this is a I don't know like this in terminal is like neutral towards every every [laughter] exchange and all of that stuff." But like it's actually so silly that all of these practices are like so widely known and like public nowadays.

[00:56:37]So it's just like everyone just knows this. This is all going on. There's like it's not even being hidden anymore because the administration in the US just like supports doing whatever you want. So we can all just like do all of these things that like weren't weren't really like allowed to do before, but like it's just normal parts of the market now >> in a way. Yeah. Yeah. Like everyone knows everyone's like when it came to like DWF shenanigans. Uh every I think shop like trading shop knew.

[00:57:06]>> Yeah. Uh some of them took took advantage, some of them did and they got wrecked and then they would go on like a vengeance like a witching hunt against DWF and like every other token they positioned in and it would create like complete chaos in a >> I think I think it's just funny where it's like a couple of years ago. I feel like this this was uh kind of said a bit more uh behind closed doors or whatever expression you want to use and nowadays it's just like 10,000 [ __ ] post about these are on the timeline right when it >> happens [laughter] publicly available. [snorts] >> A lot of like my following I think initially came from basically pointing out um what like large players are doing.

[00:57:42]>> Yeah. and like you know how you can basically utilize that in terms of trading or profit on it kind of you know when there's like weird [ __ ] you basically avoid these tokens right uh whereas like now it's like definitely more normalized because I think people >> know how to use [snorts] uh uh not just like indicators but like market data to like sniff out um inside of trading uh weird market making um directional trading like you name it.

[00:58:13]It's it can all be done pretty easily now, especially in like the vibe coding days >> where you can like uh well literally you can build like a terminal in like 15 minutes now.

[00:58:25]>> What's like your your general general outlook on on the market right now and in like where we are in like market structure cycle whatever.

[00:58:36]It's kind of interesting because whenever I look at like the total three chart, which basically benchmarks alts, I think it looks pretty good. It looks like a bottom to me.

[00:58:46]>> Mhm.

[00:58:47]>> Um however, it entirely depends on Bitcoin because Bitcoin's the king in the end, right?

[00:58:52]>> Yeah.

[00:58:52]>> Uh whereas Bitcoin did bounce off the 200 EMA, the the one week. Um as well as uh the 21 highs.

[00:59:04]Um, which I think is like significant. It makes sense to to get a massive move off this rip.

[00:59:10]>> Mhm.

[00:59:11]>> But the one thing that lingers in the back of my mind is to be a little bit cautious because if this turns out to be just a massive bare market bounce and it makes no difference in terms of the higher time frame, right? Which essentially means a lower high verse reclaiming structure higher and establishing a like one week higher high. Mhm.

[00:59:33]>> Um, and if it does that, then I'd be, you know, omega bullish because then at that point, you know, we could probably run to like 200, 250k, right? An insane kind of blowoff phase. Um, I would say I'm like optimistic.

[00:59:50]I want to see what happens essentially.

[00:59:52]Um, >> I think Treadfire is [ __ ] nuts at the moment.

[00:59:57]>> Yeah.

[00:59:58]>> Like absolutely insane. Um I think a lot of the a lot of the reason why like features move so much is um there was a ton of capital like it it wasn't really reported that much but there was so much protected uh capital like a lot of capital going to protect other capital right >> so it's kind of like the canary in the coal mine >> with this like global shorting right because of the US [ __ ] uh and then like when that was all basically forced out at premiums constantly.

[01:00:31]It it forces this massive uptrend, right? And I think that's all been blown out, right?

[01:00:36]>> I don't think it's entirely actual buying for higher prices.

[01:00:41]Uh so what I'm kind of looking at is like you have the case of reality, which is like the world's not really over yet.

[01:00:46]They're just kind of fatful, >> you know, swinging the dicks around, doing the the whole big dick contest of who's the the biggest man, blah blah blah blah. Who's the pointiest stick?

[01:00:58]stupid [ __ ] Um I think it's very important to see that resolve on a long-term basis.

[01:01:05]Uh because the the market presumably has priced in that already, right?

[01:01:10]>> Um I think half and half. Uh I think there'll be a lot more upside if there actually is a longstanding resolution.

[01:01:19]>> Mhm.

[01:01:19]>> Um and then there's there's also the case of you're going to go into it. uh oil trade normalizing, inflation coming down. I I think there's likely a inflation emergence which is going to come out which is basically inflation comes back with a massive vengeance across like multiple different uh commercial consumer um uh factors because obviously petroleum is in [ __ ] everything. Uh it's affected things like plastics, rubber even um agriculture.

[01:01:52]Uh I mean farming is a a whole different crisis.

[01:01:57]>> Mhm.

[01:01:57]>> Uh so that's that's like one thing that'll fuel inflation more. So that that's the backdrop that I'm looking at is say you know we get a massive wave of inflation. It's spook central banks.

[01:02:09]Uh I mean it's kind of happened to you actually in Australia. that's central banks into the the CBA >> to basically uh actually RBA not CBA the RBA >> uh into hiking right and the funny thing is uh when that ends when the inflation basically normalizes back to what it was before they'll be at higher rates they'll have lower growth which is station >> uh and then they kind of realize [ __ ] what next and that's typically when things actually fundamentally break.

[01:02:42]Um, so that that is also on the the macro backdrop too.

[01:02:49]So, uh, while things are good, I think, yeah, run up your accounts, whatever, take advantage of the markets.

[01:02:58]>> Mhm. [clears throat] >> Uh, but when things get pretty bad, uh, look to buy real assets like, you know, uh, discounted property, land, gold, >> those kinds of things.

[01:03:09]I think that makes sense. I was just going to swing into the into the last uh little segment if you have like any any advice for people that you want to give.

[01:03:18]I guess you already like kind of kind of started off there a little bit.

[01:03:24]>> Uh I mean if they're like like as in if someone's starting to trade kind.

[01:03:29]>> Yeah.

[01:03:29]>> Um I mean I think like honestly start just with Bitcoin one because it's liquid. uh it has decent momentum, but it doesn't have a lot of like a lot of volatility like you see in like alts where it's like kind of hard to maintain that risk and it's very easy to blow up.

[01:03:48]>> Um you know learn the basics which is like price action and level trading um like key levels. Uh look into things like opens which are like you know weekly daily opens.

[01:04:01]uh look into systematic trading which is like RSI uh mfi uh moving averages uh I think MACD's meme avoid that um also oscillator is technically like volume and like momentum which is useful um >> uh yeah I that's basically it um maybe for like further research I would research market psychology ology narratives uh speculation and cycles.

[01:04:36]Um yeah, I mean like you know that the Japanese uh stock mania that bubble was interesting. Uh Korea had its own in the past year I think.

[01:04:46]Um yeah, even like roaring the roaring 20s uh the tulips bubble. Uh yeah, learning about bubbles is pretty good >> because you know how to capitalize on one. Uh even like do um I mean like everyone's aware that the AI thing is probably in a bubble now.

[01:05:07]>> Yeah.

[01:05:07]>> Or definitely starting to be um and this there's yeah obviously the other end of that trade coming probably next year.

[01:05:17]>> When I see a bubble form I I rush into add fuel to the fire.

[01:05:23]>> Yeah. It's the whole like we are the top buyers, right?

[01:05:27]>> Yeah.

[01:05:28]Well, that's been a good talk. Thank you very much for coming on.

[01:05:35]>> Yeah, it was fun. It was fun. Uh, let me know when the next one is so I can Yeah, people's ears off again.