Crypto learnings 2023
Happy new year everyone! 2023 was my first year of being completely immersed in crypto trading / investing.
Here are some learnings and reflections.
Journal your trades + thoughts
“You can’t improve what you don’t measure”
Logging and journaling everything is the best way to accelerate the process in building up your “intuition” aka “gut feel”. In my book, it is the best thing you can do to reach consistent profitability.
Personally, I don’t automate data entry around entries and exits. The process of filling in the data manually gives you time to internalize and reflect.
Coming up with your own system and what to enter is part of the process. Copying templates is fine, but doing the work of figuring out what are the right signals for you to reflect on is immensely more valuable.
Have a process for entering trades
I primarily trade spot, and like holding periods that are on weeks / months. I’ve shared on Twitter:
And additionally, if you are a more tactical trader, define your stop loss and your exit plan beforehand. There’s no requirement to stick to these strictly, but having a pre-defined framework that you can revisit during / after the trade (and adjust in the future) allows you to see your shortcomings.
This’ll help you from FOMO buying. Additionally if done right, your losses are more manageable (paper cuts).
Similar to engineering, most of trading is about trade-offs
There is no silver bullet:
If you want to be super early (before any pumps), you could be waiting weeks if not months for a catalyst and shift in attention
If a coin has already broken out, you run the risk of getting dumped on, the risk of devs rugging is higher, and so on
The math on the returns also works against you
$2 -> $10 is a 5x, but $10 -> $18 is only 80%
If you get a good entry, a conservative approach of trying to exit tactically (pre-define take profits) presents the scenario of leaving a lot on the table
Alternatively, if you try to sell the right shoulder, you might sell 20% or more off the top tick
It comes down to what are scenarios you can live with – its extremely rare to be able to nail everything all the time.
Adjust your strategy to one that makes it so you are consistently profitable. A perfect system isn’t perfect for every trade.
Misc
In addition to what I listed above:
Keep a spot portfolio you just don’t touch, this acts as your floor, so even if you lose your trading portfolio, you will still do decently when all is said and done
Winners average winners
There’s nothing more comfy than having a good entry - pay attention in the bear market
At the end of the day, I’m still learning. I’m grateful to have had a decent year, and hope to share more of my learnings with y’all. Disagree or think I missed anything? My DMs are open and I don’t bite.
This post is sponsored by Aevo. Aevo is an options/perps DEX built on their own appchain, with one of the best options UX in DeFi - I use them myself to hedge my spot positions in a much more capital efficient manner. They are also super quick in listing the hottest pre launch tokens ($TIA, $BLAST, $PYTH) on their perp DEX
They’ve rebranded from ribbon finance and will be doing an airdrop soon. Use my this link to support me and save fees when you use Aevo
