Professional Trader Painter's Trading Philosophy and Strategy Sharing

1. About the Trader Painter

The core of trading is "people"; a person's experiences, background, character, and capital attributes determine the formation of their trading strategy.

1. What is Painter's trading strategy?

1. Capital size and allocation:

• Position the cryptocurrency market as a super high-risk market, allocating no more than 30% of total assets.
• The funds invested in the crypto market are mainly allocated to mid- to low-frequency quantitative strategies (trend strategies), ensuring that no bull market is missed and that no bear market is endured without action.

2. Expected returns and acceptable drawdowns:

• Expected returns come from quantitative data backtesting. Ideally, the annualized return without leverage can reach around 50%.
• The entry and exit of any trade should always center around stop-loss, setting a maximum loss limit of 2%-5% of the principal for each trade.

3. Trading Logic:

• In the cryptocurrency market, trends are always the source of all profits.
• Use time as leverage, rather than using funds as leverage
• Long-term survival and waiting for the liquidity dividend cycle is the most effective strategy in the crypto market.

2. Why did Painter form such a trading strategy?

1. About Quantitative

• Entered the market in 2018, initially engaged in subjective trading for about two years without profit. After the liquidity crisis on March 12, 2020, began quantitative trading, and trading began to get on track.
• Currently, the main capital allocation is on medium to low-frequency trend quantitative strategies.
• It is recommended to let robots execute feasible quantitative strategies to avoid interference from human emotions.

2. About Risk Control

• Define cryptocurrency as a super-risk asset; learning to control risk is the first step.
• Before starting to trade, the most important thing is to consider the amount of loss you can afford, then develop a trading plan and strictly adhere to it.

3. What kind of people is the Painter trading strategy suitable for?

Suitable for "those who want to trade seriously". The methods and paths shared by Painter can help you develop good trading habits, which is the starting point of a true trader's journey.

2. The Trading Story of Painter

1. Why was there a crash of "805"?

The main reason is the Carry Trade of the Japanese yen:

1. The bull market after the approval of the Bitcoin ETF is driven by the carry trade of the Japanese yen.

2. The Bank of Japan's interest rate hike, combined with the recession expectations of U.S. economic data, has led to increased repayment pressure on Carry Trade funds, resulting in sell-offs.

3. From the perspective of the market and supply and demand, there "should have been this drop".

2. What stage is the cycle currently in? What actions should be taken?

1. Judgment on Trends

• In the washout phase or early stage of a major liquidity bull market (referencing 2017 and 2021)
• The current market is more influenced by the interest rate differential from yen arbitrage, which is different from a true liquidity bull market.
• The next bull market may arrive around mid-2025 or in the third quarter.

2. Suggestions for operation

• If you acknowledge that this is a major bull market consolidation period, it is recommended to buy the dip with 10% of your position whenever the price hits a new low.
• When it comes to choosing cryptocurrencies, under sufficient liquidity, altcoins and small-cap coins may outperform Bitcoin.

3. When will a transaction expire? What is the Stop Doing List?

1. The effectiveness of trading strategies

Every strategy has its profit period and drawdown period, and the current expansion range in a fluctuating market makes it very difficult to operate.

2. About the Stop Doing List

Never make a big mistake, because a significant drawdown will not only affect the overall capital level but also damage your mindset.

3. Recommended Resources for Painter

1. Favorite trader

1. YouTube influencer Luo Sheng
2. Feizhai (the "legendary trader" of the bull market cycle from 2019 to 2021)

2. Recommended Books

1. Dennis's "Turtle Trading"
2. Wyckoff Method
3. "Advanced Trend Technical Analysis"