0xKyle's Christmas Special: 50 Lessons I Learnt This Year

Christmas is a time of gratitude and reflection, after all.

Merry Christmas Everyone! It’s the most wonderful time of the year, and I hope you guys are all snuggled up nicely with your loved ones, drinking hot cocoa and spending time together.

This week, I decided to forgo the usual Market Updates + High Conviction Bet issues - instead, opting for a more reflective article to end the year.

2023 has been monumental for my substack! I started the year with 877 subscribers, and I’m ending it with 4,866 beautiful readers. I’m incredibly grateful for all of your support, truly. <3

I started this substack as a sort of “journal” of my journey to become a better trader - and looking back, I’ve come a long way. This Christmas article is meant to go back to those roots - to share the lessons I’ve learnt in 2023, hoping that you may gain some semblance of wisdom from my experience.

Merry Christmas, and a Happy New Year! - 0xKyle

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Market Update 📝

Sike! Before I dive straight into the 50 lessons, I want to give some market colour (old habits die hard, it seems). More accurately, I want to zoom out on a macro scale. Most of you who read my articles know that in the past few weeks, I have constantly said that “musical chairs are ending, yada yada”.

Looking back, it was a mistake on my part - the crypto bull market is highly reflexive and can overextend for days if not weeks. There is not much point in trying to time the top - and while things can look like they’re running out of steam, clearly the market remains afloat.

Disbelief?!

This is one of the clear symptoms of the Disbelief stage of the rally, where retail investors keep waiting for a pullback, citing similar reasons. “This is gonna fail soon, I’m going to buy the dip, etc.”

While I am uber-long on the markets, it is quite embarrassing to make this mistake and very evident of my bear PTSD. I apologise, and it is a prompt reminder of how important it is to remain flexible when approaching markets, and how often you have to update your map. Local top != pico top.

That is perhaps, one of the biggest lessons to learn as we head into 2024 - to unlearn the bear market regime’s patterns, and to make space for new ones.

Now, let’s dive into the 50 Lessons Learnt - note that these aren’t just trading ones, but also for on-chain / general crypto market wisdom.

50 Lessons Learnt

The Trading Journal Of 2023

Trading

1. Patience is a position

2. Don’t trade your P&L

3. Long your longs, cut losers. In an attention-driven market, pumped assets are a sign of strength, and are highly reflexive. Conversely, underperformers have lesser attention, and will likely stay that way

4. Look at alt/BTC and alt/ETH charts in technical analysis

5. Trading should be process-driven - write down the steps to take, and repeat

6. Normally, you live life guided by emotions - trading is the opposite; you CANNOT follow emotions; cutting a position “because it feels bad”, or longing a position because “it feels good”

7. Most of your performance will come from a few good trades in a month / year, BUT you will have to be chronically online to catch these. You CANNOT just go off, and expect to come back and make that 1 great trade

8. Slow & steady - there is no rush to be rich, the markets will be there tomorrow, and the year after that.

9. S1/S2/S3/S4 structure (wrote about it in my previous substack)

My Most Used Frameworks In Crypto Trading

10. Bear markets focus on revenue and users as valuations slam back to realistic levels, and the metrics that matter are all very fundamental based

11. Bull markets focus on growth & speculation as the metrics that matter are more reflexive, like narratives / founder / flywheels

12. Trade attention

13. Checking price daily on longer term positions might seem trivial, but is actually poison that exposes you to the daily fluctuations of the market, and causes you to subconsciously re-evaluate your thesis

14. Your strength in trading is closely linked to your personality, and what you optimize for in life. Know yourself, and find out what type of trader you are.

15. When you know what type of trader you are, DON’T try to get better at other areas. Instead, keep honing your own style. You don’t see Warren Buffet try to get better at algorithmic trading.

16. Don’t punt a trade just because you’re bored. Seriously - it compounds hugely.

17. Leverage long when masses are scared, spot long when masses are levered long, and exit the market when the masses are euphoric

18. In a bull market, you worry about “making as much as possible” when you should be thinking about “losing as little as possible” because the market does the heavy lifting for you

19. Trades and investments are ever-evolving - the coin you longed an hour ago isn’t the same coin now; that’s why you have to keep gaming different scenarios and plans

20. Your portfolio is a battleship - decide the trend, take a core position; and depending on ocean conditions, change accordingly; If turbulent: allocate to agile plays (small). Flip flopping your main battleships take too much time and capital

21. You HAVE to have a process for selling, because your emotions won’t do it. You MUST know what you’re looking at when you’re exiting a position

22. Price targets suck as exits because they are arbitrary - SOL at 60? 80? 120? 150? when are you going to sell?

On-Chain

23. ALWAYS test your transactions

24. For up-and-coming projects, you want to bet on people - they are the ones in control of all the attention. Bullish team, strong founders = narrators can narrate = more attention

25. CT is always late - whenever you see the entire TL shilling something, in most cases it is a bad idea to join them

26. CT is also very toxic and time consuming - reduce exposure to it as much as possible; use tweetdeck, and purely for research

27. In a bear market, it’s -EV to test everything because many of them won’t survive. But in a bull market, you must have the mindset to test many things because they will yield greater profits.

28. Never chase betas, you are much better longing the leaders

29. Rotations are a game of short term outperformance, long term underperformance

30. Size DOES matter. Your shitcoin going up 10x with your size of 0.1%, versus a large position going 2x with a size of 50%.

31. Crypto is easily distracted and disloyal. Teams that know how to announce events and milestones are strategic pumpers, and should always be bet on as it means stronger token

32. For microcaps / small caps and even mid caps, you always want to exit once attention dies down;

33. The trap most people fall into for small / mid caps is that they convince themselves that they’re in it for “the long term” once the project dies down, with expectation that the project will hit the “large cap” status. Don’t kid yourself.

Qualitative / Psychology

34. Don’t be jealous of others, use them as your inspiration. You can’t spend others’s money, and they can’t spend yours. The only benchmark is yourself

35. FOMO is the mind killer. Have a process to go through whenever you feel FOMO

36. Laziness is the original sin - and it very much affects your edge (lazy to do research / try out new protocols / deep thinking)

37. There are 4 main things every great trader must acknowledge and overcome: being wrong, losing money, FOMO, and leaving money on the table

38. Fear of being wrong stems from ego - to cure it, realise that you have a life outside of trading. You’re wrong - so what? It’s not your be all end all, you have friends / family that don’t even care.

39. Fear of losing money stems from not fully accepting risk. Accept that the markets have a non-guaranteed outcome, and that there are consequences.

40. There is no possible way to avoid loss. Losses in trading are like a restaurant spending it’s revenue to buy vegetables - it’s the cost of doing business and means absolutely nothing.

41. If you can’t shut out your emotions, learn how to manage them and use them to your advantage instead. When you feel euphoric, use that as a sell indicator (and vice versa)

42. Stop trying to impose your will on the market. Stop expecting anything from it;

Life Advice

43. Never say no, but rarely say yes. If you say yes, it must be something that propels you OR something that is value-additive.

44. Consistent “okays” are much better than infrequent “greats”. Most of the work is done just by showing up everyday, even if you don’t do much work

45. It’s the pursuit of the goal, not the goal itself that leads you to happiness. As they say, “if you are in the process, you have already made it”

46. Fear is in your head. Why aren’t children afraid of insects, or the same things we’re scared of? The answer is: we are born clean, but taught to fear certain things. The opposite must also be true - we can be taught to unfear these things. It’s all a matter of perspective

47. Comparison IS the thief of joy; instead of comparing, figure out if you truly enjoy what you’re doing or you’re in it just for the social status (prestigious job, etc.)

48. Interacting with people has shown to have the strongest correlation with being happy

49. There will be no magical day where you suddenly wake up with “the motivation” to do XXX task. There is no better time than the present to do what you fear.

50. Life is simple, but not easy.

There's many ways one can attempt to define a good life. In the past, I've tried to optimize for intensity. How high I feel, and how often. How physically stimulated I am. How much I have. How much action is optically occurring around me.

As of late, the wave I'm on is a lot more chill. This could be the way. This could be just a temporary phase. I still haven't fully figured out what perfect means yet, nor do I find it beneficial to think too much about it.

What matters is presence, or peace of mind. Embodying an undeniable sense that there's nowhere I'd rather be than right here, right now, at any given time.

Regardless of what I'm doing, or what season I'm in, there's nobody else I'd rather be than me. Acceptance of every circumstance, acknowledging that the current moment is all that exists.

Bad, good, you can't objectively assign these labels. It's about gratitude in the face of whatever is right in front of you. Less wishing, more embracing. Less thinking, more presence. Simply living.”

⁃ Dulab

Hope you guys took away something from this.

Have a very Merry Christmas, Happy Holidays, and a joyous New Year!