#79 VKTR

June 26, 2023

PARTNER:

The Haven, one of the leading educational platforms for crypto traders, is Alpha Mail’s go to for all things education.

Featuring exclusive content from: @CryptoUB, @LomahCrypto, @pierre_crypt0, @LSDinmycoffee, and @ColdBloodShill, The Haven offers comprehensive resources such as livestreams, educational videos, journals, daily market updates and a large, helpful and welcoming community.

Join The Haven today.

VKTR is a professional prop trader and frequent shitposter. He is currently building IDEX, a high-performance decentralized derivatives exchange, as well as Orion Terminal, a suite of trading tools.

What attracted you to trading?

Everything. The money, the challenge, the dopamine rush, the sex appeal. It’s the most demanding and most rewarding video game in the world.


Does viewing it as a game help create necessary dissociation with the amount of money at stake?

My generation, growing up during the peak of gaming's popularity, can relate to this. However, the raw intensity of trading makes it difficult to remain unaffected by the money. Even experienced traders, who claim to be numb to it, can change their tune when facing an instant 30% loss. Moments like these can be overwhelming and bring you to your breaking point. It's hard to fight the anxiety and fear of losing money, but it's essential to recognize that these emotions are our body's natural defense mechanism. Fear is a tool that has protected our ancestors, and it can be conquered. However, attempting to numb ourselves to the magnitude of losses isn't the solution.

Instead, we must embrace our emotions, allowing them to flow through us, and make decisions from that point. Some of the best decisions are made from an emotional standpoint. Being an emotional trader isn't necessarily a negative trait; it often aligns with our gut instincts, which are rooted in emotional responses. From a holistic perspective, associating fear with large numbers and the potential loss it represents is crucial for survival. Suppressing these emotions in the beginning only cultivates reckless behavior. I made that mistake initially, disregarding self-preservation instincts that have developed over generations, all for the sake of appearing cool.

we must embrace our emotions, allowing them to flow through us, and make decisions from that point.

What’s the difference between emotional decision-making and listening to your gut?

When faced with an unrealized PNL that makes you uncomfortable, it's crucial not to ignore it. Take a moment to reflect and ask yourself why you feel uneasy. For instance, imagine you're trading with a $1,000,000 position, and you're down $50,000, starting to feel uneasy. This discomfort is a valuable instinct, signalling that further evaluation is necessary. It's not about immediately closing your position but rather understanding the underlying factors causing the discomfort. Are you in the trade too early? Is there a need to adjust your approach? Allowing these questions to form in your mind enables you to explore and comprehend the reasons behind your emotions. By consistently suppressing these feelings, you deny yourself the opportunity to tap into your own innate wisdom. Remember, it's not solely about focusing on the market; the intelligence within you is equally important.

discomfort is a valuable instinct, signalling that further evaluation is necessary.

How long have you been trading, and what markets have you traded over your career?

I've been trading cryptocurrency derivatives for six years. I've also dabbled in equities, commodities, FX, and NFTs.

What appeals to you about traditional markets more recently?

The feasibility of trading crypto fluctuates in cycles tied to BTC, macro factors, and retail activity. These interconnected elements influence the overall market conditions. With BTC experiencing low volatility, there are limited reasons to continue trading unless you’re exceptionally talented or have a compelling reason to stay. Exploring assets and trying different trading approaches is crucial, as you never know where you may discover your edge. 

you never know where you may discover your edge. 

How long did it take you to become profitable? Were there any major milestones where things just started to click?

It's hard to say since it's a bit of a blurry line, but my best guess is that things finally started to click somewhere around the 3-4 year mark. To rephrase, I was profitable since day one. However, I also consistently blew up every single account I ran up 10x within a few bad trades. I did this for several years.

What changed that allowed you to get a handle on managing risk?

I can't pinpoint the exact turning point, but several factors contributed to my realization. One significant event was when I took an FTX account from $2,000 to $120,000 and subsequently lost it all in just three trades. Previous blow-ups didn't concern me much as I had income from other sources. However, during the FTX blow-up, I was trading full-time, and for the first time, it hit me hard. It’s like going to the casino with $1 and running it up to $10,000, and then losing it all. You go home and tell your wife you were at the casino but only lost $1. This idea of thinking of gains as ‘free money’ or ‘house money’ is toxic.

Why do you think that's such a toxic mindset?  

It's the main reason casinos and exchanges can continue extracting value from you. The ‘house money’ mentality in trading leads to over-trading and mismanaging risk.

A few traders talk about this, but people naturally choose the path with the least pain. Losing accounts through liquidation is a symptom of you avoiding the pain of closing that position manually. Instead, you're essentially leaving it up to chance.

I now recognise that in the past, when I was blowing up accounts, it was from me being a pussy and not having the guts to admit I was wrong. But it’s more important to preserve capital. If I took a 20% or 15% loss, that's very realistic to come back from. It's where you get into the 80% range that tilts you as you’ve lost maybe months of trading progress on the financial side, but now your size has been diminished so much that it's extremely difficult to come back.

liquidation is a symptom of you avoiding the pain of closing that position manually. Instead, you're essentially leaving it up to chance.

What does a typical day look like for you?

During a normal trading day, I keep things dead simple. Morning start: 5 minutes spent checking overnight news, 5 minutes spent on checking trending pairs on the screener (Orion Screener), and 5 minutes TA on major indices. Then I start clicking. Avoiding information overload is crucial for me. All I want to know is what to watch for, what to avoid, when to trade, and when not to. After that, I'll spend most of the day trading when there's volatility or simply observing and shitposting when there isn't. Knowing when not to trade and actually following through on that discipline is crucial.

These days, I spend most of my time building and growing IDEX. It turns out that growing an exchange to rival CEXes is a lot of work.

What sort of thing are you looking to avoid when scanning the markets?

Essentially news events that I want to avoid trading. For example, at FOMC I'll avoid having any orders in the book and avoid trading that that time. 

I also try to avoid assets that have absolutely ripped my asshole apart in the past. These are generally weird coins on Binance perps that have a lot of volume. I've been burned on coins like that before. I don't care if it's the ‘thing’ of the day. I'm not going to trade it. It takes a lot of discipline cause it's so juicy.

I try to avoid assets that have absolutely ripped my asshole apart in the past.

Who did you look up to when you first started trading?

I looked up to a future version of myself when I started trading. I wanted to drive a Lambo with a supermodel in the passenger seat. Initially, I didn't know about CT or famous traders like Jesse Livermore and Paul Tudor Jones. I had to be my own role model, but that didn't work out well. Later, when I discovered CT and books like Market Wizards, I began to admire a variety of different traders, including Loma, SalsaTekila, Hsaka, and Cred. I particularly aligned with Salsa since I saw many similarities in how we trade.

Tell us about your most memorable trade.

During the March Covid Crash in 2019, I had BTCUSD limit bids on Bitmex that got filled at $3,900 moments before the exchange went offline. During the period Bitmex was offline, I became convinced that if the exchange came back online, the aggressive selling would continue. When it did come online 30-60min later, I took a fast exit at $4,200 and considered myself the luckiest trader in the world. Instead, BTC went on to pump to $6,000 before the end of the day and $30,000 before the end of the year.

What’s the best trading advice you’ve been given?

“Win or lose, everyone gets what they want out of the market”. I think it's from Seykota in Market Wizards. It made me realize I was subconsciously romanticizing blowing up accounts, which is what kept me from progressing beyond short-lived profitability as a trader.

I was subconsciously romanticizing blowing up accounts

What’s romantic about blowing up accounts?

It's almost subconscious in a sense. Like the Ed Seykota quote, if you have a lot of character traits that point to being impulsive and risky, you will seek that out. I have an affinity towards adrenaline and dopamine, and if you're self-aware and you know those things about yourself, you know that they're going to somehow manifest themselves in trading.

One of the ways they manifest themselves, if you have the same type of personality as me, is when you’re high-rolling. You’re not fully trading or gambling, either. It's still profitable, and it's still trading, but you’re somewhere between +EV gambling at the casino and actual trading. You're in a sort of limbo where you're not getting the advantages of completely going YOLO balls to the wall, but you're also not getting the benefits of actually conservatively growing your capital. It's such a fun, dangerous and toxic limbo state to be in because you can stay there fucking forever – until you blow up.

It's such a fun, dangerous and toxic limbo state to be in because you can stay there fucking forever.

What drives you to keep trading?

It's the culmination of all my interests and passions, and I'm lucky to have a bit of talent. I'd say it's my calling — or I'm simply a gambling addict. We'll find out one day.

Would you say you’ve ‘made it’? If not, what does ‘making it’ look like to you?

Yes and no. I'm content with my life and make enough to live extremely comfortably and enjoy luxuries. However, I want to keep growing. The key is sustainability and balance.

Trading:

What's the most important quality in a trader and why?

The most important single factor in shaping a trader is character and, specifically: discipline. It may sound corny or overstated, but it's the truth. That's why I've always been more interested in psychology than finance. If you can understand the psychology, you can understand the market. 

Any materials you’d particularly recommend on the trading psychology front?

I don't really have many book recommendations because I think the entire trader journey is an internal one. What might speak to me might not speak to you. There's a lot of advice in trading that contradict each other completely.

I think simply thinking deeply about what it is you’re doing is very important. Ask yourself, OK, well, what am I? What am I doing wrong?  Actually, sit down in your seat and just fucking erase everything from your head. Really think through what you're doing wrong. You can probably name every little mistake you’re making. It comes down to fixing them, which is the hardest part. Sometimes we even choose not to go so far as to list our problems because we feel it's so hard. That’s procrastination and laziness. Realistically, I think you must figure out the questions you want to ask yourself. And then from there, go on a path of learning.

A neat trick to help with psychology that I learnt from some size traders I know is to enter a position with a tiny fraction of their intended size. I've started to do this and it really helps me understand how I feel about a position. Now that I'm invested, I have that exposure,  how do I feel about this trade? These guys I know, they’ll do this 10 to 20 times a day and close at break-even within minutes every single time. Because, sometimes, you know on an instinctive level that something doesn’t feel right.

That's such a powerful tool. I really opened my eyes to think that the top traders rely much more on their internal instincts and signals than any sort of external signal.

I think the entire trader journey is an internal one.

How would you describe the way you trade?

I trade on lower timeframes compared to most but generally always do one of two things: fade moves in areas of exhaustion, and join trends in key areas of strength.

Has the way you trade changed over time?

Not really, it's become much more refined over time, but I naturally gravitated to figuring out my own way of understanding the market pretty quickly. I didn't spend much time learning strategies used by others or trying out indicators.

Why do you think you have success trading?

A combination of talent, determination to fuck around and find out, and an immense amount of luck.

What's the worst thing about trading and why?

The worst thing about trading is also the best thing: the highs and lows are extreme.

What's something you've learned in the last 6 months that has made you a better trader?

You can't become a virtuous person unless you were a horrible person first. I think it's a quote from Jordan Peterson or something talking about a theory by Carl Jung. It helped me get rid of some bad habits that were impeding some of my success. I think that sentence makes the journey of becoming a better person feel more in line with the standard hero arc everyone has internally. An underdog story. Getting rid of deeply rooted shitty habits is really hard, and I think having some sort of powerful motivation is required to get rid of them.

You can't become a virtuous person unless you were a horrible person first.

What's the mistake you find hardest to avoid when trading?
Overtrading. Entering when conditions are "okay" rather than only sticking to great entries. It's actually something even the best traders still struggle with and is probably the #1 killer of talented traders. I overcome this by having a small gambling account I can use for trading crappy chop. It helps alleviate my urge to trade while not putting significant capital at risk.

If you could give someone starting trading tomorrow one piece of advice what would it be and why?

Fuck around and find out as much as possible with a small budget every month. Ignore trading literature. It's okay to blow up. Learn fast and take notes of things that work. You need to find your own path no matter how much trading educators try to shill you. Things that work for others will never work perfectly for you. The seduction of thinking someone can mentor you into an effective trader or there's a win-all indicator out there is very powerful, but you need to avoid it at all costs.

The seduction of thinking someone can mentor you into an effective trader or there's a win-all indicator out there is very powerful, but you need to avoid it at all costs.

How would you describe your relationship with risk?

I think of her as a tamed beast that could swallow me at any point if left unchecked. I've been implementing more and more defensive strategies to protect my capital as opposed to obtain it. After blowing up so many times I think I have a profound respect for the dangers of risk.

I think of risk as a tamed beast that could swallow me at any point if left unchecked.

What goals do you set for your trading?

Don't lose a lot of money. Try to stack winning days.

Fill in the blanks

  • Most traders would be better off letting someone else manage their money.
  • What separates the pros from the rest is talent, luck, and sometimes immense discipline.
  • A good trader should never post PNL screenshots.
  • The biggest misconception about trading is how hard it is - it's actually pretty easy, the hard part is NOT trading.

Any other comments you'd like to share:

Please follow me on Twitter so I can sell my book to you eventually when I become washed up.