In this episode of our Round Table, we got The Dude as our guest! He’s been in the crypto game since 2017, but he took a break to work for Morgan Stanley for a while before returning to the space in 2022.
The Dude talks about his trading system, which involves reading charts, creating algos, and taking higher-risk trades.
He also shares his thoughts on how traditional finance can be translated to crypto and DeFi, and even predicts that all assets will eventually go on-chain!
So, if you're curious about what's in store for crypto in 2023, read on 👇️ 🍿
You can also give this episode a listen here
Panel
• Kadeem Clarke @Crypto_Clarke - Host
• The Dude @thedude0ne - Guest
Introduction: The Dude
• The Dude started trading crypto in 2017 when he came across Bitcoin and DeFi. He was instantly intrigued by decentralization.
• Later, he explored real estate, stocks, and options trading.
• In 2021, he left crypto to work for Morgan Stanley for 1 ½ years, where he traded bonds, specifically emerging market bonds (corporate bonds) which gave him experience in an institutional firm.
• He returned to crypto in the 2nd part of 2022 after leaving Morgan Stanley.
• Dude says he likes the look of crypto and tends to be quite bullish on his social media.
• He believes we’re in an uptrend with room to push towards the upside.
• He says that the fundamental point of many devs building in the bear market can be a catalyst to propel the space to new highs.
What made you leave crypto initially and then come back?
• He originally joined Morgan Stanley to experience institutional trading but didn’t mix well with the routine side of things.
• His ambitions were also very constrained in work, so he left to focus on algo trading.
What is your trading system?
• The Dude reached out to network with individuals about trading as well as spending his time reading new books which proceeded him to learn chart analysis.
• He then read data and created algos that would give him the specifications on what were the best coins to trade.
• He gives an example “When a new coin pops below RSI 20 you can get an alert to trade for example”.
• The Dude conducts his trades higher risk to reward trades aiming for an average of 2:1 RR as his usual approach.
• He adds that psychologically you can’t be afraid of losing otherwise you cant win. You require to put emotions to the side.
• He is working to create algo trading bots to utilise different strategies to automate trades and risk and completely remove the psychological element.
Listen to The Dude on low risk high/high reward trading -
How does TradFi translate to DeFi and crypto?
• He says BTC is trading against the dollar as other equities are too such as the S&P500.
• DXY is the dollar index and he mentions how a bunch of attributes affect the index including wars and the FED.
• He makes a key point stating when the FED raise rates, this reduces the money supply but when you lower rates this puts more money into the market. He then explains this is why we see the fluctuations in market price.
• When seeing interest rates rising, this means less money in the markets meaning the dollar is more valuable and BTC falls.
• The Dude also believes that lowering and cutting rates can be anticipated because of inflation slowing down.
Check out the audio from this section of the Round Table -
In terms of bonds themselves, do you see them going on-chain?
• The Dude believes that all assets will eventually go on-chain because it make sense due to the point that the global market can be fully tracked.
• He also suggests houses may be able to soon be bought on-chain because of smart contract utilisation and ease of use for consumers.
• He suggests making bonds trading into options trading for the retail market to utilise leveraging bonds. He says this is a likely way they can interest market participants to the bond market.
Listen to the discussion on OnChain Derivatives here :
Whats your outlook for TradFi and crypto going into 2023?
• The Dude says crypto traditionally de-couples and as we see a further steepening in the bear market, we may see more FTX type situations which would cascade mass liquidations
• He equally notes that over the next couple months as interest rates start lowering he believes crypto will decouple and can be propelled upwards.
• He says at the moment the range we're consolidating in is limiting volume but he believes this is starting to pick up.
• The Dude believes interest rates will not rise anymore and that they may stay where they are (5%) till the economy goes down further. Only then, will rate cuts occur once the FED are happy. This will in-turn pump the market eventually he says.
• The Dude finalises with mentions that this cycle will be tough because of geopolitical factors such as war as well as possible hyperinflation or stagflation.
Here’s the discussion on how interest rates may affect crypto -