An unusually nerdy post

Markets are a little spooked right now because Nancy Pelosi is on her way to Taiwan and there is a non-zero chance the Chinese will start some shit over it.

3:1 risk/reward ratio, stop loss at Manila

(Trading Dad joke)

There are some subtle clues in the price action warning us of danger here.

When a market gaps up it indicates that all the sideline buyers have mashed the buy button at once.

This is PANIC buying. 

After everyone panic buys, there is a temporary situation where there are no longer fresh buyers to keep driving the price up.

What that means is that a little drop in prices can start an avalanche, because there are no buyers to step in and stabilize things.

If you’ve been trading for a while you will learn to notice that most often when the news is warning of a drop, it’s really the price action not the news.

We see this even more clearly in the crypto markets, where yesterday’s hammer candle low is already broken intraday

So overall… I’d be very cautious in the equity markets today and crypto looks awful.

But let me be very clear.

Even though I’m short-term bearish on stonks, I DO think the bottom is in and we are going much higher in the next months.

The short setups I posted a few days ago are doing great though!

Congratulations to those with the testicular fortitude to grab some of those easy wins!

I’m excited for the webinar in about 15hrs time where I’ll be showing you version 2.0 of our crypto salary system.

And because it would be crazy to just trust some guy on the internet I’ll be sharing all of the backtesting and data which we used to improve the system again.

Let me give you a sneak preview of the nerdy goodness.

One of the questions that keeps me up at night is “how do we KNOW that a stronger funding rate translates to a better edge?”

And there’s a standard quant way of testing this in isolation.

You see, when we put everything together in a system with stop losses and targets there’s quite a bit of luck involved in the interaction between these things.

You can be unluckily stopped out of a good trade, or a bad trade can luckily hit your target.

So to take luck out of the equation, quants do a “factor” test.

This is a simulation of just buying all the coins with positive carry, and shorting all the coins with negative carry. (if you don’t understand that don’t worry, just come to the webinar)

For the first time we’ve been able to unequivocally show that even naively buying the coins with a negative funding rate and shorting the coins with a positive funding rate is a strong edge.

And by adding the rest of the system rules in it turns into something really powerful.

I’m well aware that most of you don’t understand this stuff.

And you don’t need to.

In fact, Version 2.0 of our Crypto Salary System is far easier to trade than the old version.

My daily “work” takes me a fraction of the time it did even a few weeks ago.

Leaving me more time to do the things I want to do.

Which, as it turns out, is a lot of just fucking around doing very little and hanging with my family and friends.

See this bowl of awesomeness? It’s Pho (wifey’s favorite soup)… it’s been simmering for 24hrs and making me hungry from the time I woke up.

I promise you I ate the absolute fuck out of that after BJJ training.

Then had a nap with my baby girl.

You see the theme here?

I’ve been able to craft a life that I’m absolutely delighted with.

That I know for a fact I’m going to have no regrets about…

And I’d like you to have that too.

I’ll show you how tomorrow, and share all the deets on the improvements to the system.

If you haven’t registered… HERE IS THE LINK

See you there, 7pm EST Tuesday (Wednesday morning Aussies)

Scott