#26 Cryptoshadow

June 6, 2022

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Cryptoshadow is a full crypto trader and educator. They are the founder of the @Tier7Trading group.

What attracted you to trading? 

A close friend of mine bought ETH near 10$ (or something insanely low). He got rich, he told me about it and it sparked my intrigue. Quite a few of my uncles were also large capital investors and I had always wanted to get a foot in the door - so it piqued my interest. 

From there I went to meditate in the forest alone for 2 months. Upon completion, I developed the resolve to become a trader. The goal was to be able to make 700$ P/M, whilst having time to meditate. At the time I was living a similar life to a monk, so making a few trades to keep my belly full was attractive.

You seem to place a lot of importance on meditation and trading psychology - can you tell us a bit about why this is so important to you in trading and in life?

That's correct. This is because it's completely clear to me that keys control the trades, the fingers control the keys and the mind controls the fingers. What distinguishes one person from another from their consistency, learning style, execution and ability to discern with discretion is the level at which their mind operates. A lot of people understandably say it's useless, but that viewpoint is shady to say the least.

"keys control the trades, the fingers control the keys and the mind controls the fingers." @cryptoshadowoff

How long have you been trading? 

Almost six years full time. These days, I trade less and I'm far more in tune with when to floor the gas or when to trade conservatively. I also have less of an issue waiting for setups or doubting the quest to sit silent.

How long did it take you to become profitable? 

I was profitable from the start - but likely only because I entered during the beginning of Crypto mania. From my recollection, it was around 1 and a half years until I had some kind of discretionary method that made sense to me. The main thing holding me back was not studying my winning setups with enough depth. I sorted that out by creating a playbook that I reference from time to time. The other thing was strength in contextual analysis, which transformed my PNL rapidly.

Do you have a daily routine?

My daily routine isn’t ALWAYS the same because life sometimes requires flexibility. Everyday I work on body speech and mind (exercise, spoken word & affirmation)

That said, my day consists of hydrating the second I get up, followed by meditation and breathing exercises. The goal is to lower my heart rate and develop the ability to pick the thoughts I want to use rather than react to the thoughts that come. 

From there, I’ll take a break and unwind for 30 minutes before I scan the markets and come up with my plans for the day. These plans must be crystallised until they have been stress tested, contain multiple variables and are easily actionable or I don’t move from my desk.

How long does it take you to formulate these plans? How do you know if you’re forcing a trade if you won’t leave until you have one?

I don't force trades very often, because if I do I can feel it. It doesn't feel right. Plan formulation takes anywhere from 30minutes to 3hrs depending on how much contextual work I've already done and whether the climate has shifted since then.

I will also challenge my contextual bias when possible. In this light, the goal is to be clear so that I can alleviate stress and be certain of my plans so that I can execute from my phone if necessary. This certainty then offers a shield against a wholly uncertain craft.

After that, I’ll have high protein meals throughout the day and go to the gym at some point depending on when I need to execute. I will usually check the market at even 4hr intervals after I have my strategies in place.

This certainty then offers a shield against a wholly uncertain craft.

What's the worst thing about trading?

That key money-making events are sparse, easy to miss and usually materialise in extremely small windows (as far as RR asymmetry is concerned). Even if they take a long time to form - the formation can feel invisible if you’re tracking it without resetting. So whilst you can to a degree track the market from compression to expansion, it requires you to be strategically consistent 365 days a year.

Even if I already have a full stomach, failing to capitalise on a key trade or event in the market by either under-risking, having an incomplete strategy or missing it entirely is painful for me. It’s a 'catch 22' because whilst it inspires you to be more diligent if it’s something that is well below your skill level and you missed it - there is no one else to blame. The sting of unnecessary failure runs deep.

Tell us about your most memorable trade? 

Dumping the BCH Coinbase pump 2017 right at the top. I barely had any capital back then but it was fairly euphoric for me to fade the crowd in one of the biggest pump events I’d ever seen. It was also the first confirmation to me that I have a gift for identifying peak euphoria (to an extent).

What are some of the signs of euphoria?

I reference my reactive mind + compare that to social sentiment across social media. I also track where i believe players are positioned. This is more than enough.

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

Patience and selectivity is correlated with wealth. It doesn't resonate on a personal level but rather it is just a simple truth. Deals in life don't come around often, that's what defines them.

Trading:

What's the most important quality in a trader? 

Developing higher levels of awareness and using this awareness to ask better questions. What you do not know is only what you do not know because…. you have not pondered it and cannot see it.

This is the skeleton key that opens all doors - but it isn’t the same phrase as the term ‘trading psychology’. For example, a higher level of awareness will reveal to you that trading psychology is absolutely useless if you do not understand how the markets work or your method is poor.

What you do not know is only what you do not know because…. you have not pondered it and cannot see it.

How do markets work?

Markets are the sum total of all participant behaviour - retail, institutional, algo, MM & perhaps brokers or exchanges. All entities are trying to make money - so where can you slot in?

Why do you think you have success trading? 

I’m excellent at reading how the masses move and using confluence to point to a single conclusion. Wisdom of the crowd is a real thing in the markets because value is what people want it to be. That said, there is a fine line between Wisdom of the crowd and the end of reflexivity.

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

I’ve known this for a while but my understanding of this is deepening dramatically. Execution can be solved by developing a feeling of long term certainty (feeling of success) and then combining this with short term certainty (planning heavily so that you feel certain you can deal with an asset like a pro).

Certainty can be improved by understanding probability, and understanding probability can be improved by understanding why the market moves. With full recognition that certainty and probability are not entirely correlated.

Does such heavy planning reduce the number of markets you trade?

Yes to an extent, but I still trade broadly. I don't like to limit myself. It's just that the more markets I look at the longer it takes to plan. So be it. 

What's the mistake you find hardest to avoid when trading? 

Staying up too late and watching the markets when I should be sleeping. It’s not worth it, but I do it too often. Still working on it. That or getting glued to my seat, getting distracted and not walking when I should be. It's most definitely down to addiction, a drive to be improve or simply tilt.

"your main principle should be to act differently at all times from the standard model trader" @cryptoshadowoff

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

My biggest gift to anyone reading this is to think about the following quote that I have developed as my own slogan for all of my trading actions ‘Principles Over Paradigms’. Try to understand what it means.

The majority of the industry is a scam and its character (consciously or unconsciously) is to take your money. Since it is a zero-sum game, the rich thrive on information asymmetry and execution asymmetry (acting in unique ways).

Therefore your main principle should be to act differently at all times from the standard model trader that is taught from easily accessible resources. It’s not about the method per se, it’s about your edge as far as execution is concerned.

The second principle is to slow down your time horizons - it takes time to get wealthy without blowing up. Rome wasn’t built in a day. Steadiness begets steadiness.

Third, some of the most wealthy people in the game are a product of a lottery - not skill. Meaning acting in the same way as some of the Crypto kings is a 90% surefire way to lose all your cash.

The fourth principle is you can’t simply pull money out of the market at will, it gives what it gives.

Since it is a zero-sum game, the rich thrive on information asymmetry and execution asymmetry

Fill in the blanks

  • Most traders would be better off using paradigms and not principles
  • What separates the pros from the rest is awareness and experience
  • A good trader should never have wipeout as a potential when risking
  • The biggest misconception about trading is that wonder boys have skill - when in fact they are product of an existential lottery