Bitcoin update/ triangle philosophy

What’s up everyone,

I hope the bear market hasn’t been too rough on you all. I’ve been using this time to do more research into bitcoin and build trading infrastructure for the future.

I wanted to write today that I am expecting more downside from this point, but I strongly believe we will bottom this year. Volatility has been decreasing in this range, and because of the trend, the break in volatility is likely to the downside.

I want to talk about my opinion of volatility . I’ve heard opinions from people I respect who say that supply/demand are totally different from support resistance, but I am more inclined to say they are about the same thing than to say they are completely unrelated.

Specifically, I want to talk about how I interpret the low volatility now. My main assumption is this: demand for a coin is based on price and not time for the medium term and that all the demand that will exist at that price exists at the start of the interval (medium term because fundamentals change slowly, and people’s real appreciation of them changing is even slower). What does this mean? Well, say the price is in the $3,000 range (*like now*) based on my models, I think it’s a good range to buy so I place orders in this range. Let’s say my orders represent all of the demand at the floor of the level.

If the price rises above the floor, it is due to other market participants buying. Now, if the volatility shrinks, what does that imply, it implies less people other than myself are buying and the sellers remain constant (in proportion to eachother) or it means there are equal buyers, but more sellers. Either way, the price fluctuates less because the demand can’t force the price to move upward (in this specific case to the market now – obviously in different patterns the scenario is different). So what happens?

Sooner or later, my orders which are at the floor of the range will be filled and thus price will break below it and volatility will therefore increase.

This idea more or less is the idea behind why descending triangles are bearish and why the reverse are bullish – at least, this is why I think they are. In my opinion, they are more indicative the higher the timeframe (a triangle on ltf won’t trade as easily as on htf ).

Hope this helps,

-YoungShkreli

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Goals update – January 2019

I finished another goal for this year and have made progress on the others as well…

GOALS TO ACHIEVE BY 2020
1. become competent at programming
3. understand most/all that j does
4. become competent at deep learning
5. make $$$ (revenue) from businesses
6. understand all finance books
7b. mazeppa (short version)/upload to utube
7c. competent at piano
8. All As
9. seriously be involved in self storage
10. competent in kanji
11. read 60 books (15/60)
12. have a 6 pack
13. automate your trading
14. make some sexy programs / build trading infrastructure a la j (charts/metrics etc.)
***2. basically understand how computers work
***15. 6′ mile (5’35”)
***7a. rhapsody in blue (31/31)

I finished Rhapsody in Blue by George Gershwin on Christmas day, but just didn’t think to share it here. I’m still building the habit of posting here… I should probably make a note of adding here on a regular basis… but I still don’t know where I want to take this so no worries.

You’ll notice I’ve read a few books as well. I’m currently reading two books, one on modeling with differential equations (wanting to model bitcoin) and the other is about deep learning (which being competent at is one of my goals).

For the most part, every day I am spending about 10 hours daily working towards my goals (70 hours a week). What are you doing to achieve yours?

Not only do I spend time doing the necessary tasks to achieve my goals, but I also take time to reflect on how I am doing and strategically think about what I can be doing better. For example, for learning Kanji, I was using WaniKani, but found I didn’t like how slow it was and didn’t feel it was right for me because I need more practice than what they offer. So, I resolved to just go through the top 100 most common kanji. That is my goal for this month and for the year, I am hoping to go through 100 every month. I think knowing 1200 will give me the ability to read japanese at a decent level. I’m just making flashcards for myself to do this. I am finding it to be better.

My goal in life is to help people. I am someone who is very spiritually connected to the world around me and I just want to make an impact. This is my solution to philosophical absurdism (https://en.wikipedia.org/wiki/Absurdism) that I have arrived at after years of meditation and experiencing my own death through that medium.

Of course, I have selfish goals too. I hope to accrue wealth for myself, but not for the sake of buying Lamborghinis or anything of the sort, just because I want to improve where I am in every aspect of my life. I want to have better relationships, better health, better habits, more wealth, more fulfillment etc.

That said, what I care most about is helping those around me. I care about helping people because I know that if we all grow together, we can change the world in big ways. I believe I will be remembered most for the people I helped, not for the success I experienced.

I don’t have any goals written down for helping people, but in my mind they do exist, I just haven’t put it on paper. For now, I need to focus on improving myself before I can really improve others. I am still a YoungShkreli. One day, I will not be, and that is when there will be goals that are almost exclusively aimed towards improving others. That said, I can get started today by helping people here.

Some of my goals (>= 1 year timeframe):

  1. Help my brother make more money. (he’s working three jobs and making about $200k doing so. Idea is so he can retire early. I tell him you are far more likely to become wealthy by having your own business or at least having serious equity in one. If you are going to work that hard, do it for yourself or at least have skin in the game)
  2. Help the people at the hedge fund I work at achieve their goals. (I guess largely this is financial, I am hoping that I can help them become multi millionaires and take their company to where they want it to go and beyond. I will do this by demanding radical transparency and excellence from all involved. Of course, I will also help out with the technical side of it as well, but really, it all comes down to not tolerating bullshit. They are smart enough, they just need to go make it happen)
  3. Help my father build a real estate portfolio that he can retire off of.
  4. Help my mother retire as soon as possible (my parents divorced recently and so she is having to get a job, but I unfortunately am not wealthy enough to secure her and my dad’s retirement yet – but I will be in a decade)

 

CMF and bearish divergence example

ysblog1

Hello readers,

Noticed this just now. It’s a damn shame.

Well, consider this a textbook example of bearish divergence on the CMF indicator.

The CMF is calculated as such:

1. Find the Money Flow Multiplier
/(High – Low) = Money Flow Multiplier

2. Calculate Money Flow Volume
Money Flow Multiplier x Volume for the Period = Money Flow Volume

3. Calculate The CMF 
21 Period Sum of Money Flow Volume / 21 Period Sum of Volume = 21 Period CMF 

So the price was going higher, but less money was flowing into it. The price was increasing parabolically and, well, the CMF sure wasn’t! If you saw this happening, you would have made a fortune. Unfortunately, my strategy for most of the year completely ignored the CMF . I still don’t use it, but it’s good to get as much information as possible and this is just more information. Next time, I’ll be checking it periodically.

-YoungShkreli

Recent Trading Mistake #1

Hello readers,

I want to share a mistake I made a few months ago that cost me a bit of money…

I had code that calculated my risk information, but there was some bug in it and so I wasn’t using it for a bit. Big mistake.

Some of the calculations you make for risk are very straightforward and can be done rather easily. I did the calculations in my head and long story short… I made a mistake. I took a position that was substantially larger than I meant to take and I lost money because of it.

The point I am making is that I can’t imagine how I would trade without the software I’ve written. You can’t trade without risk management. It’s just that simple. Risk management is the ONE thing you must get right… all else is secondary.

The vast majority of traders, especially in the market I trade most, crypto, are incredibly foolish and lose money. They lose money for a lot of reasons, but the biggest is improper or nonexistent risk management.

You are a trader, it’s a given that you understand the potential gains of trading, but do you understand the risks? 

Let’s go over a trade I made today and see if we can make sense of this simple calculation/thought process.

Trade_example2trade_example1

This trade ended up making money, but it didn’t have to… that’s why you think ahead

Suppose the most I was willing to lose on this trade was $1,000. Generally, I don’t risk much more than a few percent of my account on a trade.

I call this number – the most you’re willing to lose on a trade or net position – your risk limit.

You can arrive at your risk limit a few different ways varying your stop-loss (you could hedge instead) and varying your exposure etc.

In this case, I had a particular stop-loss in mind, namely at around $98. For simple math, we will say my entry was a short at $96. So, that’s a difference of $2. Therefore, my maximum could only be as much as $1,000/$2 = 500 ETH.

This is the simplest calculation you can make, but it’s one of the most important. Even if you don’t know how to program, I would highly recommend downloading Pycharm and Python and just try to write some software to do this for you. I am a dreadful programmer, I don’t know a darn thing! That said, I am resourceful, and I can’t tell you how much value even my humble skill set in coding has brought to me. If I can do it, trust me, you can too.

https://www.jetbrains.com/pycharm/      #download this

https://www.python.org/          #then download this – pycharm is a place to write code, thisis how it actually runs

REMEMBER! Almost everything that you are working at has been done before by someone more experienced, google your question and you’ll likely find an answer.

Here are 2 excellent YouTubers who make great videos:

https://www.youtube.com/channel/UCxX9wt5FWQUAAz4UrysqK9A (csdojo)

https://www.youtube.com/user/schafer5 (corey shafer)

Hope you learned something,

-YoungShkreli

The most important skill you can develop: discipline

Let me share with you all my schedule:

いち. (2 hour) しゆかだい , べんきょうする, 数学 (study math)
に. (1 hour) にしきへび , コンプタ (Python, learn about computers)
さん. (1 hour) よむ (read)
よん.(.5 hour) はたらきます ビジネス , すとれじ,ききん, おんがく(businesses)
ご. (2 hour) ピアノ change to 1 hr after finishing rib (piano)
ろく.(.5 hour) 日本人 (japanese)
しち. (.5 hour) うんどうする (workout)
はち.(.5 hour) もくそう する (meditate)
きゅ. (2 hour) しゆかだい べんきょうする 数学 (study math again)
go to bed at 11.30

This is 10 hours a day and I don’t believe in days off so that’s 70 hours a week. I don’t always get all of this done because things get in the way or I might spend more time doing something than is allocated. Some weeks, I put in over 100 hours. I am a full time math major, so this also adds time to my work week, I just often count the time spent in class as time spent studying, so I don’t have to add it separately.

Let me also share with you my goals for 2019-2020 (I’m starting a little early because I completed all of my goals from 2018-2019) :

GOALS TO ACHIEVE BY 2020
#1. become competent at programming
3. understand most/all that J does     (J is a guy who runs an energy hedge fund)
4. become competent at deep learning
5. make $$$ (revenue) from businesses        (not going to share with you exact revenue)
#6. understand all finance books (derivatives/ those workbooks)  (preparing for potential wall st interviews)
#7a. rhapsody in blue (16/31)
7b. mazeppa (short version)
7c. competent at piano
8. All As
9. seriously be involved in self storage
#10. competent in kanji     (I enjoy learning languages)
11. read 60 books (8/60) must read the technical books too   (this is overlap from this year, I already read 60 books so this goes towards next year)
12. have a 6 pack
13. automate your trading
14. make some sexy programs / build trading infrastructure a la J (charts/metrics etc.)
***2. basically understand how computers work
***15. 6′ mile (5’35”)

*** – means I completed the goal

# means I’m on my way to achieving the goal/ likely to be done within a few months

I want to share with you this information about me because thinking in advance about all that I want to do helps me live a focused life with purpose. I also have a planner where I write everything I do throughout the day to keep track of whether or not I am doing what I am supposed to.

So, how do I not be a lazy POS? Methodology. I am not a naturally hardworking person. I am focused – as in I’ve always been able to focus on one task for hours and hours – but I’ve never been disciplined

The key to my success in radically changing what I do and who I am is a result of a long battle of trying to stick to a plan.

Here is what I recommend you do to become disciplined:

  1. Think about what you want to achieve within the next year
  2. Write down what you decide those goals should be
  3. Come up with a daily workload that will allow you to achieve those goals
  4. Buy a planner
  5. Track everything you do
  6. Do your absolute best to do what is most important every day. If you are too lazy to do everything you planned to one day, at least do what is most important. It is very hard to stop working for a week and just get right back into the habit.

Really pay attention to the last step. Discipline is all about momentum. Taking even one day off will hurt your momentum and make it harder to work. If you really aren’t feeling like working at least do what is first on your list. Never go a day without not doing what is first on the list. You must be very sober about fighting your laziness. You do not want to work. You and I both know it. Do not fuck yourself by slipping once you get yourself to do work. Fear it like death.

Lastly, and this is for you people who believe in spirituality, meditation has helped me a lot. You need to think deeply about who you are and what it is you need to be doing.

You need to think. You need to be methodical. You need to strategize. You need to grow…

-YoungShkreli

What should you major in?

Pursuing higher education is one of the largest investments an individual ever makes and is also probably their first major investment period.

At the tender age of 18, most people have no idea what the fuck is going on. Some people never really do figure it out at all. This is a problem, because choosing what to do with your education is a major decision and at this point in your life, you aren’t very well equipped to make a good decision.

Well, if you are reading this, you are likely someone who is somewhat wise. Wisdom is learning from the mistakes of others so that you don’t have to make the mistakes yourself. It’s ideal because mistakes can be seriously expensive in terms of cold cash and especially in terms of opportunity cost.

With this said, you’ll be open-minded to listening to my humble advice based on a mistake I made.

The story begins…

Since I was a young lad, I wanted to play soccer professionally. My parents never let me play for any teams growing up because they said kids were mean and what not. Nonetheless, I always played by myself outside. Kicking a ball is more or less the most fun I can imagine.

I was a good player and by the time I was about 15 I spent just about every hour of the day ,that wasn’t spent in school, outside playing. I figured at this point, I needed to really step up my game if I was to make it pro. So, I did. Long story short, I was good enough to play semi-pro by my senior year of high school, but I didn’t have the same amount of experience as a lot of other kids who had the luxury of playing on a team since they were single-digit-aged. 

This hindered my growth long term, but it also halted my growth short term because college coaches weren’t that interested. I got interest, just not from any really good programs. It was underwhelming to say the least. The sexiest option I got was to go to a school abroad (out of the US – I’m American). That’s what I did. To condense this, it didn’t work out and it was an expensive mistake. 

Moral of the story:

The moral of the story is that there is probably something in your life that you are EXTREMELY passionate about and you think that is the only thing you are ever going to want to do. I felt the same way, but I was wrong. Although I never got the chance to play on TV, I am still a genuinely happy guy and in many ways happier than I would have been because I get to use my brain these days. You are probably in the same scenario I was.

When choosing what to study in college there are really two options: 1) focus on your passion – or something you think you’d really enjoy, or 2) focus on what is responsible for you financially.

I chose the first and it was a mistake. It likely is for you too unless:

  1. You have serious reason to believe you are going to be extremely successful (you are the best player at La Masia)
  2. You would be happy doing something laterally related to your pursuit (coaching, managing etc. if not being a baller)

You probably need to have both of those things checked to be confident you are making a good choice.

If you decide that you probably won’t be that great (I never thought I would be, I just deluded myself into thinking low professional level was cool) then you should probably focus on option 2: focus on what is responsible for you financially.

Why? Because, well, you will make money. That is a given, what’s more, you will have the freedom to at least figure out what the fuck you want to do next. If you are poor, you don’t have this luxury, you need to get money today. There’s no time to be philosophical.

It’s the latter part that is most important to you as a non-robot. You want to be satisfied on a deep level and want happiness and fulfillment. Well, if you are giving up on a passion, it’s going to take time to figure out what you are going to do instead, but trust me, there is something for you. In my case, I decided I was going to dedicate my life to changing the problems I see in the world – a much nobler goal than kicking a ball (they don’t have to be mutually exclusive).

Now to answer the question:

So, what should you do? Well, I’ll tell you what I think you should do. Mathematics. Yes, I think you should major in mathematics. If you are like most people, that sounds pretty lame to you. That’s okay, you probably don’t love anything you suck ass at initially. But, math, like anything else is a skill. You can acquire it. You might not have the IQ to ascend to the top of the ladder and make intellectual lightweights out of people like Newton, but you can go pretty far (farther than you think – which is what is profound).

Mathematics is a great thing to study because you will learn how to approach problems logically. Especially, in your proof-based classes, you will see the world much clearer than most ever will because you are dealing with fundamental truths. Granted, they are often truths about numbers that you don’t care about, but the logical structure will apply to things that interest you.

Jim Simmons of RenTech would be someone to look into if you want an example of how math can be profitable.

As you probably know, STEM pays much better than liberal arts ON AVERAGE. With that said, mathematics is what unites all of STEM. It’s last in the acronym, but it’s first everywhere else.

Mathematics will give you the mental workout you need to get brain gainz and it will give you a toolbox to apply in literally an field. It is also good for status. Status and reputation are important. You get jobs based on how you are perceived often. If you want to fool someone into thinking you are smart, studying math is a great way to do that. I’ve read the average IQ of math majors is 130. You do not have to have this IQ to do math, it just attracts smart people.

Which leads me to the main point: studying math will help you meet a lot of smart people. People are your main resource in life. Without other people, you are as likely to thrive as you are without water. Smart people are the FIJI water of humans.

ANSWER: Major in mathematics!

Mathematics should be your major, but you shouldn’t be done with learning there. You should also do your best to be extremely proficient at programming. I am not great at programming, but I’ve saved myself a lot of time and money by writing software to give me information about my trades/portfolio/risk.

At first, I hated programming, but now that I can almost do things, it’s quite a blast. Don’t quit on things at first just because you suck and aren’t having fun. If you know it will be helpful to acquire the skill, then by God acquire that damn skill!

Programming is also helpful in the marketplace as you probably know. JP Morgan won’t even look at you without programming experience.

Lastly, I would recommend you read about 52 books a year. Try to have a good amount of technical books in there. Your aim when reading should not always be to have fun. It should largely be to enhance your mind. In time, you will find that is a lot of fun.

Hope you learned something,

-YoungShkreli