8/3/25 - Market Recap
Trading a trend system means that I am losing most of the time.
Below, here’s some rough statistics of the real performance after fees of my crypto trend system for the past 2 years.
(I’ve had material changes to my portfolio open exposures, that I’ll outline at the end of this post.)
Although my win rate is not terrible for the type of system I run, for example I personally know trend/momo traders that realize win rates below 35%, it still means that I am losing 6 trades out of every 10 (on average).
Most people can’t handle the swings that my system will incur, and that’s fine, because knowing that something is not desirable for my competition, gives me a certain added confidence that I should continue to have long-term edge.
I was talking to a friend the other day and he does really well with his transporting company. One of the things he showed me was how hard and custom some of the jobs can be. But that’s the source of his edge, that’s why his customers hire him, because he can do the hard job that most of his competitors just can’t, and not at his level. That’s his edge. Same concept here.
A few days ago, if you were allocated to crypto, you were winning every day. Every day you woke up, and your portfolio was higher.
But one little thing about trading crypto, is that it has the tendency to have really nasty retracements on uptrends.
Suddenly, it retraced 20% within a week.
We have some historical precedents, but one of the periods I most remember is one that I was involved in.
In our Research Article #71 I shared a dynamic stop-loss approach to trading trend. The system is not relevant , just that it is trading trend.
In 2023, it started the year quite well with a bump to portfolio all time highs. Then, by the end of summer, it gave all of the returns back and then some.
Looking at a simulated equity curve is easy. We don’t even care because it all looks manageable when it’s not with real cash. But I went through it. I went through many periods as such. It’s frustrating. It can throw you down if you let it. Especially for someone like me with 93% of my liquid net worth on my trading portfolio.
But if you’re going to do this business for a long-time, you need to understand that this is the reality of the game. Most of the time you’ll be “suffering” in PnL, and a few times a year, you make money, and hopefully compensates for the periods of losses you just had.
You need patience, do smart things, don’t bet too much, improve each day, and let the law of large numbers play out.
Focusing on short term returns is just going to make this game much harder than it needs to be. Being too happy about unrealized profits will the inevitable retracement much harder on yourself. Being too sad about unrealized losses will make that time miserable. Ask me how I know it!
Learn to detach yourself from short-term outcomes and focus on long-term metrics like quarterly/yearly returns.
Market Recap
Most of the coins are now below their 20 and 50 day moving averages. The retracement is quite clear across the board.
If we look at the major coins that have been leading this move, such as ETH, XRP, BNB, SUI, etc, they are still on relatively strong higher timeframe uptrends, by most technical measures.
It’s just that the pullbacks can be quite nasty after strong push ups.
I am not expecting much going into the summer though and the play will be into September/October.
My Portfolio — Update
On our portfolio tracker you can find there the data I am going to describe below.
As of today, our allocation stands at 13% of our total portfolio. Quite a significant reduction following the abrupt retracement we’ve had in the past week. Despite me thinking that there’s still some strong trends, I don’t argue with my system. It’s what kept me in the game for quite a while.
We’re still up 10% from when I began sharing publicly my positioning. Quite a great time to start sharing my trades isn’t it? Right at the peak! My brilliant timing skills came in handy once again.
Just kidding. It’s important to share both good periods and bad periods and I am glad it started at the peak of my equity curve. Shows the reality of this game.
I’ve been doing this business for a long time and I expect to be here for much longer. Over the years, I’ve learned to deal with my ego and not allow unrealized equity to have an effect on other areas of personal life, including writing these reports. If I stopped writing every time I went into a drawdown, I’d probably never write this newsletter!
Business as usual.
Now let’s get to the material changes to our portfolio. Let’s start with the trades we’ve closed for a total profit of 9% on equity: