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@52kskew is a systematic trader and seeker of market alpha.
What attracted you to trading?
It was initially the same desire as every retail newcomer; to passively generate an income aside from working your atypical job.
However, the nature of markets caught my interest - to trade or rather to understand the flow of trading.
You say passively - did you come into trading thinking it would be easy?
I mean building up my spot portfolio swing trading passively before I learned leverage trading. Leverage really opens doors to insane opportunity for such little cost but is also extremely risky if you don’t follow a strict trade plan; how much you will risk, where to take profit and when to cut losing trades.
Your interest in how systems work - was that something you were also doing in your day job?
Before trading, I was involved in computer engineering/science - I want to understand the nature of systems, and my background reflects that.
My interest is more in how markets work and how they price and react to specific strategies. Learning about systematic trading and, subsequently, flow can help reveal traders' bias during / going into a session. This data is valuable to include in your plan as it can support or invalidate ideas.
How long have you been trading?
I’ve been trading for around two years. Bitcoin was the first asset I traded, and I am still predominantly active in crypto.
I occasionally traded traditional assets like FX pairs or ES/Equities because of seasonality and clean risk off/on strategies.
The primary focus for me isn’t what I trade but rather how and why I choose to trade. Market strategies in any given situation need to be adaptable, regardless of bias.
“THE PRIMARY FOCUS FOR ME ISN’T WHAT I TRADE BUT RATHER HOW AND WHY I CHOOSE TO TRADE”
How long did it take you to become profitable?
Honestly, it’s not hard to be profitable. The hardest part is learning not to overtrade and retain those realised profits. Overall, it took me about a month or so.
How would you describe your style when you first started trading compared to what you do now?
My initial trading style was more price action and the typical supply/demand zones with RSI & Stochastic indicators. It was great to visually interpret metrics you can’t see behind market rallies or crashes because an algorithm drives it.
That led me to apply Bollinger Bands + EMA/MAs to my trading style, meaning I had a lot of data points to consider, but price action always tells the tale of weakness, strength, failure and acceptance.
How I trade now is not that different but is simplified down to only a few major data points identifying where momentum starts or ends and trend continuation.
Systems don’t need to be overly complicated if you understand price action and market mechanics. However, I would say momentum and trend following systems are a must.
Do you have a daily routine?
I like to start the day with some kind of exercise and a good breakfast, then cleanly organize my priorities for the day to avoid burnout/too much stress. End the evening with some downtime away from markets to relax my body and mind. Good sleep is crucial too, hard in this market but not impossible.
Has burnout been a problem for you?
My mindset has burnt me out a few times. I believe that most traders become mentally and physically exhausted at some point and wonder, “why I am feeling this way?”.
When burnt out, the first thing to do is to step back from large stressors and see how you can rebalance your daily life to reduce strain.
Don’t chase unrealistic short term goals; let markets play out and take good setups. Don’t chase losses or riches so aggressively that it impacts your everyday routine and health.
Would you share with us your most memorable trade?
I was short for the COVID crash. My target was around $5,000, and I was not expecting it to go as low as $3,000. I sized up at about $7,100 the day before the crash as I saw spot selling into passive derivative bids, which protected my position.
What’s the simplest way to explain how spot and derivates relate to each other when gauging market strength?
The most straightforward explanation would be that market strength and weakness involve both psychology and price. Perp traders tend to be greedy - so if we see margin traders selling into spot buyers, it indicates underlying strength. If spot is selling into margin, then it shows underlying weakness.
Margin drives the market, but spot reveals true strength or weakness.
“MARGIN DRIVES THE MARKET, BUT SPOT REVEALS TRUE STRENGTH OR WEAKNESS.”
What’s the best trading advice you’ve been given?
Keep it simple. There’s no need to overcomplicate your trading system. Have patience in the market and yourself; self-investment is your best investment.
Some days the best use of your time is building, not trading choppy price action. The skill here is learning spread trading and maximising your time to focus on other opportunities.
What's the most important quality in a trader?
Control over your mind and emotions. Your system should identify opportunities where it's most optimal to be risk-on or risk-off and stick to that plan.
Learning to read and accept the market pricing vs your bias takes practice simply because everyone is addicted to chasing profits which causes overtrading.
Set mental limits to prevent overtrading in suboptimal conditions.
Why do you think you have success trading?
Success means you didn’t give up on yourself or the market's infinite opportunities. Taking advantage of those is crucial for success. Ultimately it comes down to your patience and ability to stick to your game plan.
What's something you've learned in the last six months that has made you a better trader?
I’ve become more aware of market participant bias and psychology's role in identifying a new or changing trend.
When the market is clearly in a state of depression or greed, you want to start looking for opportunities to scale out or scale in. That involves playing clear invalidations on intraday trends that support a higher timeframe trade plan.
What's the mistake you find hardest to avoid when trading?
Occasionally I still take profits too early in new trends due to over rationalisation from previous trends. I mitigate this by not oversizing and following a trend based strategy like MAs & CVDs.
Narratives bets can take a long time to play out, so you have to position yourself in areas of actual value. I cut the position if the thesis is invalidated, but it’s essential to let the trend play out. Ultimately it's playing the momentum of trends and not fading that.
If you could give someone starting trading tomorrow one piece of advice what would it be?
Learn and understand before you act on a speculative bias. I would suggest researching indicators and market dynamics to understand how and why price reacts to levels on your chart.
That might be Stochastic, RSI or orderflow and market profile trading, reading tape to start with.
For specific names who have great content to learn about the market: