Crypto Market Wizards is RabbitX’s series of interviews with professional, sophisticated DeFi traders. We learn about their background, investment philosophies, strategies, psychological processes, risk management, and any other interesting bits of information that helped cultivate their process and make them the success they are today.
We do this because it’s interesting, and we want to help everyone learn to be better investors. Part of what makes DeFi great is we’re all learning in public together, every day. This content is our way of contributing to the community. Enjoy.
Our first interview is with Stoic. Stoic found RabbitX very early (probably some meta commentary there on his ability to find new projects before they launch) and we got to know him from his intelligent, thoughtful contributions to our Discord.
We later found out he’s not only a crypto trader, he’s also a mechanical engineer with a top-secret security clearance and lifts free weights religiously (this is the real alpha). We want to shine a light on one of our own for our first episode of Crypto Market Wizards, so we sat down with him…
BTB = @BackTheBunny
BTB: Nice to finally meet the Discord PFP sir. Tell us how you got interested in trading.
Stoic: I created a paper trading account in 2010 as a freshman pursuing a Bachelors degree in Mechanical Engineering. I aped my fake money into APPL, TSLA, MSFT, etc and forgot about the account. The next time I signed in it had tripled in value in 2-3 years. My interest was piqued.
I got into traditional markets in 2013. I wanted to understand basics like what happens when you buy a share, what it represents, fundamental analysis, etc. Trading came much later. For years I sporadically lightly traded, but my risk-averse engineering brain kicked in and yanked me away. In 2020 while going through an extremely difficult time I needed something to distract me, arguably not a healthy strategy, and began seriously trading.
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BTB: A measured, calculated origin story. How very mechanical engineering of you. So how’d you get into crypto?
Stoic: I came across crypto in 2012. I saw a Silk Road article detailing crypto usage and it drew me in because I saw the potential of what BTC could do if used in the right way. Around 2014 I created a Coinbase account and started pitching in money on a weekly basis when BTC was in the $200s. Guess I’d be considered an OG? Except the twist is I sold it all in the $400s. My mindset was one-dimensional due to a traditional markets mindset, i.e. a 2x was a great play.
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BTB: If you had to pitch your edge or unique capabilities, how would you describe it? Don’t be humble.
Stoic: My edge is in setting aside emotions, AKA “stoic”. If I find myself getting emotional, an alarm goes off and I recalibrate. I’m brutally honest with myself and don’t fear being wrong. Aside from this, I would say my work ethic is unmatched. I fully embrace the grind. I’m a robot when it comes to learning. If I get fixated on something I investigate it to its absolute core.
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BTB: Let’s get into some alpha, how would you describe your trading and/or investing strategy?
Stoic: It’s based on determining the type of participants in the marketplace, their conviction, and my own. For technical analysis I mainly rely on Auction Market Theory, TPO, volume profile, PoCs, and orderflow. I also sometimes use Fibonacci charts, liquidations, RSI and AO (momentum indicators), and Ichimoku Clouds.
The fundamentals component is my personal interpretations of new narratives, research on projects, seeing if whales are involved, etc.
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BTB: What are your favorite resources to do your technical analysis?
Stoic: I use Exocharts for market profile (TPO charts), volume profile, and orderflow (footprint charts). TradingView for conventional candlestick charts, oscillators, Fibonacci extensions and retracements, and ATR levels.
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BTB: Do you have a preference on what crypto you trade? For example low liquidity alts, governance tokens, majors, etc.
Stoic: I stick to mid-cap alts and majors. But if I see a setup on any chart, I’ll trade it.
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BTB: Something I’m personally curious about, why not just trade majors on leverage? Collectively they’re just higher-beta ETH, no?
Stoic: It’s more of a psychological thing for me. I would rather trade alts on lower leverage than open a higher leverage position on a major.
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BTB: What was your first big win?
Stoic: My biggest total return on a trade was right before the FTX crash. It was a long swing trade on LINK, it returned about 170% and was roughly 3% of my portfolio going in. My biggest on a percentage basis was a short APE trade that netted around 600%, but was only .5% of my portfolio.
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BTB: Was it life-changing or just a huge gain?
Stoic: Just a huge gain.
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BTB: How do you determine your entry and exit points?
Stoic: This depends on the timeframe I’m using for the trade, meaning if it’s a scalp, intraday, or swing trade. Some factors that influence it are risk/reward ratio, market structure, Fibonacci levels, high time-frame support and resistances, and my personal read of where retail places their stop-losses and profit-taking.
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BTB: When is it right to double down on a losing trade?
Stoic: I have learned through hard lessons to never double down on a losing trade. My biggest losses have come from doubling down. This may work for others but it’s catastrophic for me. I stay away from this 10/10 times.
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BTB: I assume you take a similar approach to adding to winners?
Stoic: Yes, it’s rare I add to a winning trade. I like to formulate a plan and stick to it. If I start getting greedy it’s an indicator for me to take profits and avoid emotional impulse. If you find yourself wanting to screenshot your PnL or feeling giddy, it’s probably time to take money off the table.
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BTB: How do you deal with losing streaks?
Stoic: By as objectively as I can assessing the execution of my strategy and looking at it as a probabilities game over time. If your strategy produces a profitability of winning trades 70% of the time, this means in 100 trades you’ll lose 30 times. But the distribution of the losses are left to chance.
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BTB: What’s your position-sizing process?
Stoic: It depends on my conviction, which is determined by the drawdown I’m willing to accept. For scalps I contain risk to 2-3% of my portfolio, and for swing positions it’s 5-6% at most. I also do not take trades that yield a risk/reward that’s lower than 2.5-to-1.
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BTB: How do you analyze your performance?
Stoic: Based on how accurately I followed my plan. Losing trades can be considered successes if I adhered to my process; losing is part of a successful, iterated process. If the process in aggregate starts to produce too many losses relative to expectations then it’s time to reevaluate the process.
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BTB: Do you keep track of your equity, net worth, PnL, etc on a daily basis?
Stoic: I keep track of my PnL on a weekly basis.
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BTB: If you weren’t doing this what else would you be doing?
Stoic: I don’t trade full time. I’m a full-time mechanical engineer. I’m proud to say I have supported and have been a part of integral work for US nuclear submarines, aircraft carriers, R&D on missile defense technology, R&D on hypersonic weapons, and nuclear weapons.
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BTB: A couple lifestyle questions now. Do you have any hobbies or interests besides trading?
Stoic: I’m always trying to optimize performance as it pertains to the mind and the body. I’ve been lifting for 10 years now. I enjoy reading, mainly philosophy, psychology, and about the human brain. I also like to write and listen to podcasts (Rogan and Huberman). I like to delve into successful people to learn about their journey and mindset. I also play the acoustic guitar and paint (water colors). Traveling is something I’d like to do a lot more of too.
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BTB: What’s your ‘rise and grind’ process to start a trading day?
Stoic: I follow the Andrew Huberman approach with my own spin. I like to get into an icy-cold shower to shock me first thing in the morning. This may sound trivial but it’s game-changing for me. This is followed up by 5-10 mins of meditation using the Wim Hoff breathing method and some sunlight exposure. I then look at the charts before I look at anything else. I like to develop my own conclusions on the market before being exposed to the ideas of others. My preferred news sources are Blockworks, Messari, DLnews.com, and Bloomberg. I also follow RabbitX’s daily Bunny Digest as well for news curation. I like CryptoPanic.com and CT for my news feeds. Some accounts I enjoy are @CanteringClark @Pentoshi @Crypto_Chase @Cheguevoblin and @crypto_linn.
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BTB: Any books that have been particularly influential in your development?
Stoic: Yes, here’s a few of them:
- “Trading in the Zone” by Mark Douglass (masterful for trader mindset and psychology)
- “The Wyckhoff Methodology in Depth” by Ruben Villahermosa
- “Profit with Market Profile - Identifying Market Value in Real Time” by Dr. John
- Kepler (provides understanding of market profile to provide an edge if you are already using traditional technical analysis methods)
There are many others, feel free to reach out to me for suggestions.
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BTB: What’s the best parting advice you can give to fellow tradoors?
Stoic: One of my favorite traders told me “If you approach trading probabilistically like a hunter you’ll do well. If you approach it like a fucking herd animal you will get killed and eaten, as nature intended.” This is something I always keep in mind.
I urge everyone to engage in physical activity of some sort and be consistent. Challenging the body and the mind along with treating your body like a monastery enhances every area in life. A significant part of my routine is getting in the gym and lifting for both strength and size.
When trading, remember “randomness is unstructured freedom without responsibility”. You are solely responsible for every decision you make in life and for every trade you take. You are responsible for the outcome. The market is not out to get you. No one is out to get you. The market did not go against you. There are no “what ifs”. If you failed to pull the trigger on a trade, there is only “what next”. The market flows like water. “Be water my friend”.
Follow at @BackTheBunny
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