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@Cubantobacco is a senior trader and the head of crypto research at one of the world’s largest crypto prop firms, a web3 advisor, and a hobbyist developer of trading indicators.
What first attracted you to trading?
As a young kid with a newly single parent, I watched my Mum use her precious metals expertise and professional network to find alpha in the equities market and pay our rent through trading. This was a massive inspiration for me to begin looking into the market.
I entered a couple of simulated high school trading competitions between 2006-2008 and found I had a knack for it. After a $5,000 personal loan from the bank, I began trading equities in 2010. I branched out into BTC in 2011 and began arbing cash rates, and eventually moved to crypto derivatives in 2016, before trading professionally for a proprietary trading firm from 2018, where I am still today.
How long did it take you to become profitable?
After my first three years trading equities, I was up about 60x, focussing solely on the resource sector. I had a strong foundation in oil and gas as well as proficiency in fundamental research. Crypto derivatives were definitely the most difficult transition. I lost a fortune in the first couple of weeks, before turning it around after about six months of painstaking grind.
What does an average day look like for you?
I generally wake up and work out before I switch on my trading PC. This sets a productive mood for the day and gets me into a good rhythm before I sit in one place for the rest of the day. Once I’m at my desk, I look at the general market tone based on direction, volume, sentiment, etc. I then identify under and overperformers that I might wish to scalp.
“YOUR PERSONAL RELATIONSHIPS AND MENTAL HEALTH CAN BEGIN TO DETERIORATE WITHOUT REALISING.”
— CUBANTOBACCO
What's the worst thing about trading?
Honestly, I love trading and always have. I wouldn’t say that there is a worst ‘thing’ but one of the hardest is finding a healthy balance between trading and the rest of your life. Without being conscious of life outside of trading, your personal relationships and mental health can begin to deteriorate without realising. This then has carryover effects on your trading and can impact your bottom line.
What is your most memorable trade?
Shorting $5,000 BTC on Bitmex with $6MM notional during the breakdown in November 2018. I ended up getting out way too early and then proceeded to scalp $2B in volume the whole way down. I still only made a fraction of what I would have if I had held.
A close runner-up would be my $3400 long in Feb 2019 on similar size. This time I managed to take profit at the highs as well as add at the lows, before closing at $4.1k.
What's the best trading advice you've been given?
Something that always stuck with me was some advice given to me by a senior trader at the firm when I was in training after a significant loss. He told me to forget my previous account balance, adjust my clip sizes immediately, get back on the horse, and trade with my new balance rather than holding on to what could have been.
Anecdotally, if you start sending fellow traders screenshots of your PNL, it’s probably time to take profit. I can’t count how many times this one has rung true, for myself and for others.
Why do you think you have success trading?
Honestly, it’s because I love what I do and I’m constantly amazed by the minds in this industry – there’s never a dull moment. I strive to stay creative with my approach to understanding the market, and I’m always open and trying to improve on my process. You can’t do something you hate for 18 hours a day and expect to enjoy life.
What drives you to keep trading?
For me, it comes down to the love for the game; trying to understand the ever-evolving puzzle and staying one step ahead of its participants. How can you not love that? The way I see it, regardless of how much wealth you accumulate, if you have a talent for trading, you can never really trust anyone other than yourself to manage your money.
“IF YOU HAVE THE TALENT FOR TRADING, YOU CAN NEVER REALLY TRUST ANYONE OTHER THAN YOURSELF TO MANAGE YOUR MONEY.”
— CUBANTOBACCO
What's something you've learned in the last SIX months that has made you a better trader?
After almost five years of scalping crypto derivatives and a little time off, I feel like I’ve finally struck a good work-life balance. In addition, the importance of asset selection has been centre stage for me for the last six months, and that has been my core focus of refinement.
What's the most important quality in a trader?
Resilience and resourcefulness. If you can’t handle and learn from making and losing fortunes, you’re in the wrong business. Also, you need to develop a style of trading that is in sync with your personality, and that only comes with time in front of the screen.
What's the mistake you find hardest to avoid when trading?
I often find myself entering trades prematurely as I always like to be ‘in’ the market. Slowing things down and waiting for that ‘feeling’ or stepping away from the screen every now and then has helped me improve on this immensely.
“I OFTEN FIND MYSELF ENTERING TRADES PREMATURELY AS I ALWAYS LIKE TO BE ‘IN’ THE MARKET.”
— CUBANTOBACCO
If you could give someone starting trading tomorrow one piece of advice what would it be?
Never have one single point of failure. This means never have your whole portfolio in futures, never be all-in on a single asset, and also never trade to live.
This is critical because there is so much tail risk from factors both within your control and outside. Particularly from a discretionary trading point of view, it’s important to not be 100% reliant on your day-to-day trading performance. This puts unnecessary pressure on yourself to perform and it becomes easier to convince yourself you have an edge right now when you likely don’t.
Also, always live below your means because risk always comes to collect its debt.
What does making it mean to you?
I believe making it means having the wealth to live as a perpetual traveller, being able to subscribe to flag theory and experience life through a series of global adventures. The idea that we should be bound to one room, one role, one town, and one life, is in my opinion, one of the cruellest tricks played on society. Making it, to me, is transcending that lie and having the means to live extraordinarily.
“THE IDEA THAT WE SHOULD BE BOUND TO ONE ROOM, ONE ROLE, ONE TOWN, AND ONE LIFE, IS IN MY OPINION, ONE OF THE CRUELLEST TRICKS PLAYED ON SOCIETY.”
— CUBANTOBACCO
Don’t be too hard on yourself, everything always works out in the end.
Find, network, and hold dear the friends that share your common interest in trading. When things get tough (and they will), these are the people that you can rely on for advice and support. When things get good, these are some of the only people that will understand the trials and tribulations you went through to achieve what you have.
Lastly, buy your loved ones a house each. They deserve it after putting up with your long hours and account PNL swings for all these years.