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Crypto Market Wizards w/ Jordi Alexander
Recorded: March 15, 2025 Duration: 1:23:40Space Recording
Short Summary
The transcript highlights significant growth in the crypto market, with Bitcoin's price increase and record-breaking performances by trading firms in 2020. It also discusses emerging trends and strategic decisions in the crypto space, reflecting broader industry shifts. Additionally, innovative economic measures by the Fed during market disruptions are noted.
Full Transcription
2-1-2.
Are you there, Thickey?
Hey, can hear you.
You hear me?
Yes, I can.
Okay, perfect.
We're gonna give it maybe like five, ten minutes before we get started with the fun stuff just to let people filter in.
I've noticed that like when you start spaces, it's best to give it like 30 minutes for people to slowly.
It like peaks after like 20, 30 minutes of waiting.
What do you do for the first 20 minutes?
I just like chill and I don't know, other stuff.
I just let it run.
Okay, okay.
Have you taken any positions into the weekend?
No, nothing new.
Are you surprised that we're bouncing?
Does it hurt you inside your bearish self to see the prices going up?
Oh, really.
I mean, I think, in my opinion, it's kind of just following equities with like a little bit of a lag.
So, you know, equities, like, NASDAQ was up like 2.5% yesterday.
So it makes sense that Bitcoin's up like 4ish.
Yeah, this is true.
I'm just glad when equities are going up.
I mean, what percentage is that worth do you have in equities?
Not much.
Maybe like 30, 35.
Okay, that's not too bad, actually.
It's a decent boomer allocation.
Yeah.
I know, but like, you know, it goes up 5%
it's like a meaningful, meaningful move for me.
I'm happy.
I realize, I realize that you only need to like,
you only need to like make 20, 30% a year every year.
And eventually you just have infinite money.
Well, I mean, if you're Brian Johnson,
but, you know, it takes a lot of years.
So the math is not as good as you think.
I've been a lot of time thinking about this.
Okay, let's hear it.
So it takes a while and I would say like decades to get anywhere, really, at that rate.
You think it's like compounding so fast and 20, 30 percent, it's fine.
It's not.
You do the math, it takes forever.
So, you know, I'm all for like being patient.
and building gradually, but if you assume that we're getting the base at like 10%,
which in my opinion, it's more than 15%, but let's be, let's be conservative and say like,
you know, your fiat is getting the base at 10%. And you're making, you know, 25% a year.
I mean, how many years do you think it takes to, let's say you're starting with like 100K,
which is already, you know, not too bad a place to start.
Yeah.
How many years do you think before you make 10 million or something?
100x at like 20% with 10% of it going?
You see what I mean?
It actually takes forever.
I mean, yes, it's very sensitive to your starting point.
But once you get closer to your goal, you can grow it a lot slower.
Yeah.
I see. So what think he's telling everybody is that, you know, he's kind of made it.
You know, he's got his millions. So at this point, he just needs to run 25% and then he's in control.
Okay, dog, if you have 100K and you're measuring your P&L in percent, like, that's less than, like, working at McDonald's full time.
Like, it's not even, you can't measure yourself a percent if you have 100K.
I mean, you should have the same process, right? Like, I mean, you shouldn't play differently if you're,
I don't know, like 100K is like a starting point that's that's reasonable to start thinking in percent.
I don't know.
Same process, but you need to have, you need to have like, you need to run a lot higher risk.
Because there's like a large fixed cost to living and you have to beat that hurdle by a significant amount in order to even make justified being here.
Yeah.
I think, in my opinion, the process starts to like a million.
Yeah.
You might be right.
I mean, like, you know, when I, we're a little bit like different, different ages, right?
And I remember, like, when I was graduating, all anybody wanted was like to try to, like,
there were a few people making six figures out of school, but it was like so rare.
Like, there were like a couple investment bankers, basically, just going straight into like
investment banking.
That was the only profession paying you like 100K a year.
You know, now.
Like, you know, my secretary is making 100, like, you know, it's not, it's not, it's not, it's not the same.
And that's why I'm saying, though, like 10% is a conservative, you know, the basement number as well.
Yeah, that's fair. I mean, the number also, the basement number increases as you go up because like you don't measure it to CPI or money supply anymore. You start indexing it to your luxury goods and your lifestyle. And that tail end of your expenditures always grows at a quicker rate than everything else.
Exactly.
Like, I think there's a bifurcation in society between like the, the asset rich and the asset poor.
And the asset rich are buying different things.
And the inflation of those things is more like, you know, what's the price of a Formula One ticket?
What's the price of like, you know, like first class airfare, like a five-star hotel, like a museum-star restaurant?
Those things are going out quick.
And maybe, you know...
some basic costs like a TV are not moving or like a tell it you know whatever
electronics obviously like I have deflation as well but I'm quite cognitive
of oh you know you're swimming against the current and if you just sit still and
you know put it in in 5% treasuries it's better than sitting in cash that's
where you are but it's still it's still not enough yeah it's by no means a scratch
That's exactly right. Yeah. So, like, I actually feel it's going to get worse. Like, the acceleration of this stuff is going to prescendo. And, yeah, like, you know, a few years ago, like, people were debating on Twitter about, you know, is this a number that you retire at? I don't remember what the number was, like, two million something. Like, people were throwing some number. But, yeah, we're kind of...
we're moving at the speed of light we are i mean i remember like in 2018 2019 it used to be like
two three million and then by like 2020 it was like five to ten and like now it's like 15 it's the
number just keeps creeping up at like a very high rate yeah yeah and it's funny like you look at
these like small ecosystems like the poker ecosystem you have these poker players and they're
they're occasionally getting fed by the outside world right like you know there'll be some
rich guys that come in and throw some money at games and and all the professional make a little bit and then you know this is kind of like what sustains and you can kind of be that the stakes at which they're playing are also going up because the recreational guys you know it's one of those luxury goods it's the same as like a formula one ticket like playing in in the belagio at bobby's room is is kind of equivalent and certainly like you know these guys are are playing higher and higher stakes and um
But on the other hand, did you see the recent net worth of the top 15 billion years in the world?
It looks like Elon's lost like 150 billion or something.
There's a little bit of bumpiness on the road.
I saw that.
Yeah, there's a lot of volatility up there if you want growth.
Yeah, yeah, there is.
Except for Warren Buffett, he seems to be just grinding.
Maybe he's done the 25% a year thing, and he's lived long enough, actually.
It actually works.
Warren Buffett's on Thicky Mode.
Yeah.
All right.
I think we're ready to get started.
All right.
All right, cool.
Okay.
So yeah, just a brief introduction of, I guess, my goal with the start of the series.
I talked about it a bit over the last spaces, but for those...
I don't know.
There's like...
You know, everyone's not really incentivized to like share what actually works and what actually doesn't.
So, like, when I first entered and, you know, I read Jack Schwager's, like, infamous book series, like Market Wizards, it was, you know, it was very impactful on my trading journey.
And, you know, I still reread it all the time and glean a lot of, like, useful, like, timeless universal lessons that, like, still help me to this day.
Yeah.
So, yeah, I wanted to start like a sort of similar series in crypto because, you know, I think crypto is quite a unique market relative to other markets we've seen in the traditional world.
There are different sets of rules, different game being played.
And naturally, the participants that excel in crypto are not going to be the same that sweep the floor in other markets.
And yeah, like, you know, there's a lot of people on Twitter that, like, no one really knows who's actually good at trading and who isn't.
There's a lot of LARPs.
It's like...
you know, it's hard to find like verified results.
There's a layer of like OPSEC security, you know,
shrouding the entire thing where like you don't really want to let people know you're a good trader.
There's some downsides to it.
But anyway, so yeah, like I've scheduled like a series of interviews with people that I think are, you know,
the top traders in this space.
Jordy graciously,
you know, agreed to be the first person in this series. I am planning to do like a text version of everything that's spoken in this space today.
And that will be like the canonical sort of legacy formats. Like so there will be like edits out of what we say today. So, you know, feel free to...
you know, it'll be cleaned up in post, Jordy.
But anyway, I'd like to introduce our first guess, uh,
Jordan Alexander. When I first started trading crypto, like your account was one of the first, I think, 10 that I've, maybe even the first five that I followed.
And yeah, I really looked up to you. I thought we came from like very similar backgrounds and both in HFT and poker.
And, you know, you've risen to the top of the game in not just one, but like multiple areas of crypto trading.
Yeah.
You know, obviously HFT with what you're doing at Seleney, but also discretionary and venture.
Yeah, thanks for joining us today.
I'm glad to be here, man. It's always good to talk to you.
Sweet. So yeah, like, you know, you probably told the story before, but everyone's like always interested in like what the origin story of like a good trader looks like.
Is there anything like unique in your childhood that like led you to the path you're on today?
I mean, I guess like playing chess, playing poker, playing bridge was part of my childhood.
I took chess and bridge specifically very seriously in my teenage years.
And playing on an international level, you know, competing at like international youth championships and stuff like that gave me both like the confidence.
But the one thing that's, you know, consistent across my life is...
being around other top performers and just picking up stuff through osmosis. So, you know, I'm from a
small country called Cyprus. I did live in the U.S. for a good part of my childhood, but, you know,
definitely like in Cyprus, you're not going to see a lot of, you know, world-class performers on any
level and getting the chance to play it at this like international level is something that
You kind of see the top guy, you know, it was like Magnus Carlson, he was 13 when I was,
I'm a little bit older, but he was still look around and Fabiano, you see these kids and they had
like a high rating than me, even though they were, you know, much younger and just looking at them
and they're just the way that they acted and trained was something that I think just helps
everybody learn through osmosis.
Like you said, I've tried to share stuff for years now, occasionally when I have time.
I love sharing my process and I think other people learning through like a similar
is just good for society.
Yeah.
Did you have like a natural talent towards these games or was it something that you had to work on a lot as a kid?
I had a very strong raw talent for sure.
And...
I would define that as like being mathematical,
you know, being relatively quick on your feet.
I had what is called like a good card sense.
In Bridge, this was kind of obvious, you know,
you think about what the other cards other people have and you kind of start planning around it.
So that stuff was very natural to me, I would say.
The thing that I lacked for like many years, like deep into my adult years was the structure and the, you know, like taking that raw talent and like directing it properly.
And it's cool to see all the.
the people that don't have to go through what I went through,
you know, and they're very successful traders from a young age.
But for me, it was a struggle taking that raw talent and applying it properly.
Yeah, I've noticed this trend is that the world has gotten better at, like,
matching talent with like the games that they excel at.
Like before it would take a lot longer and now so the process is a lot quicker.
Well, look, I mean, partly, like, it's, you know, it's so much,
easier to get good of things now.
I was just thinking about this earlier today,
you know,
watching some high-stakes poker championship stuff going on.
And nowadays, if you want to learn, you know,
whether it's chess or poker,
you really have like all these tools, like simulations.
You can use all these AI tools.
You can look at the raw truth.
And it's like verifiably correct in a way
versus having to like build up your intuition
and,
organically, you make a lot of assumptions and you don't know if you're correct.
Like you might have a teacher. He's teaching you something like, you know, your chest teacher
showing you an opening and like you're showing you the move based on, you know, 20 years of theory.
But it's actually wrong. Like, you know, there's like a bad continuation that they don't know
about. Nowadays, you can you can skip through a lot of that. So maybe that's partly why
you feel like it's a lot easier and quicker to get good at stuff now.
Fair enough. I remember back in the day, you used to talk about, you used to have written
your bio too, being like a first principal's thinker, do you think that having to figure this
out on your own, and other than, I guess, the kids of today that are just getting coached
and told the truth, do you think that, like, that sort of muscle has been flexed more,
given your path? Yeah, I think so. There's a couple advantages to going this flow route.
Certainly, like,
sitting down and doing the math yourself many, many times,
gives you some extra intuition that it takes longer.
It takes longer to get to a certain level,
but also it's such a solid base to keep building upon
because you understand things at a much deeper level.
So I played chess from a young age,
then with Bridge.
That was my teenage years.
Really fell in love with that game.
Then poker, you know, from 18 when I went to college,
it was a way to actually make money from all this other stuff.
So it became not just for fun,
it became like a way to gain independence, right?
Like from your parents, from, you know, people having to pay for you.
Like, you know, being able to take your girlfriend on a trip.
Like this stuff was very motivated by, you know,
just taking your skill set and using it to make money.
And, you know, after that, there was a period I was doing sports betting.
which I would say like really builds your intuition for odds changing in real time.
You know, you have to keep readjusting probabilities.
And, you know, those things put together, I guess, a foundation that, yeah, maybe you don't get if you're just, you know, speed running through.
Sorry, my connection dropped a little bit.
Poker in Call It. Hello. Can you hear me?
Yeah, is my connection?
I think my connection is okay.
It might be yours, but I think I dropped out.
But yeah, so you started playing poker in college.
Like, what year was it?
Yeah, I started college 2003.
This was literally like moneymaker peak just happened.
You know, he just won the World Series.
And so, you know, that was like the all the rage.
And we've seen this thing throughout the last, you know, many years.
Like, there's a thing where young, smart guys, especially, you know, it can be women as well,
um, can just like make a lot of money.
And, uh, it's like the hotball of money.
And now, you know, now it's crypto, maybe in the past it was poker.
Maybe it was like daily fantasy for, for some period.
You know, the hotball can move around.
I mean, if you don't mind me asking, how much money did you make playing poker in college?
Yeah, I mean, I would say like, uh,
enough to pay tuition and like you know live like a good student life um i think at the time
maybe it was like 50k a year type of thing you know i was um playing pretty big for you know like an
18 19 year old um doesn't sound like a lot now but you know back then it was a decent chunk online
mostly like poker stars yeah it was only thing yeah so i was playing this uh
scammie site called Ultimate Bet.
And they're the one that got in trouble with the super users, right?
There was a super user.
I did end up playing against the super user.
I was like beating everybody and then like this one guy I was sitting heads up playing
limit, he just kept like calling my bluffs with nothing.
Like, you know, I would have nine high, he would have like jack high or something like this.
And yeah, so I got, I had some swings.
You know, you have to give back to the cheaters.
But this kind of stuff, you start learning about fairness of games and being exploited.
And it's something that served me the rest of my life.
Yeah.
So did you just be a poker pro after college?
What was the path after that?
What did you major in college again?
So it was econ, not as like a hard...
you know, science is like computer science or pure math.
Econ is kind of like a bit looser,
but I did get to take a lot of game theory classes
and, you know, specializing game theory,
did like a thesis on it.
So that was like my path.
I also studied psychology.
I never really wanted to be like a pure math guy.
I like the social...
aspect of life. So doing a psychology and econ, a double major was where I landed. And then I didn't
really intend to play poker professionally when I graduated. It was meant to be like a part-time thing I was
doing while I was boarding school. So I just moved to New York and this was 2007, got a job at one of the big banks
doing some very lame first year graduate stuff,
just mainly like paper pushing,
some asset management stuff, whatever.
And that was extremely boring.
I think I did that for maybe like nine months,
and then the crisis hit, the 2008 crisis.
And I had been playing poker on the side,
like sometimes in the weekends and stuff.
And at that point, I just decided, you know, out of waiting for the financial prices to resolve versus just taking matters into my own hands, I prefer to become a poker pro at that point.
Okay. So was like the poker sort of market not as impacted by the financial crash as like other job markets were?
Yeah. You know, surprisingly like the, I don't know, like the gambling market isn't recession proof exactly, but, um,
There's a certain element of people that are more active when the normal market is down on these types of things.
So, yeah, it didn't feel like poker changed much.
It was still, that economy was still doing very well.
Fair enough. And I guess like what was your mindset getting a job instead of like focusing on the poker full time out of college? Because, you know, I think the economics probably would have worked out in favor of the poker just focusing on that. Like why did you decide to try to get a job in in banking?
I guess like all this is like short term versus long term. So short term, yes, like you can probably do better. But the growth is,
on the poker path, you know, sticking with that for, you know, decades, at some point, yeah, you can be, you can be Bill Bronson and just if you love it that much and it's the thing you love the most in life, then I think it makes sense.
But for me, like I said, it was always something that I enjoyed passionate about it.
I like the competition, but it's not something that I wanted to make my life's work.
Fair enough.
Fair enough.
And did you also think that, like, I guess you knew the market wouldn't be around forever?
Yeah.
the poker market?
I don't know.
I don't think I thought that it would go away.
At that point, it felt like, you know, people always loved playing cards.
Like, you know, they were gambling on, you know, Wist and gin and Bridge, you know,
all this stuff for decades and decades.
And I was kind of steeped in that culture growing up.
So I wasn't worried about poker going away.
It was just, you know, not necessarily...
something I wanted to do forever.
But I did want to give it a shot.
So as soon as I had the first excuse, which was,
okay, well, it's 2008, it's this financial crisis.
I had to tell my parents that I'm not going to do the Wall Street thing anymore.
I'm just going to move to Miami and play poker.
Got a lot of pushback, especially from my mom.
She was not happy at all to be able to tell her friends that her son is a card player.
She was lying to all of them saying that I'm doing a PhD or something.
Yeah.
But, you know, those years I kind of cherished them.
They were, there were years of like a lot of personal growth.
You know, when you don't have a structure and you don't have a boss telling you what to do,
you kind of have to figure out for yourself what to do and you have to start taming your ego and taming your emotions.
It's such an unstructured life.
It's actually like a very difficult life to be a poker pro,
especially for somebody who hasn't grown up with like all these,
you know,
ways of thinking like,
I'm going to keep a spreadsheet with all my results and I'm going to be very proper
about what percentage of my bank role.
and I'm tracking my,
I wasn't doing any of that stuff.
It was purely,
I'm good at this.
I'm just going to play anybody at any stakes and see what happens.
During that period,
What do you think the biggest things you've learned about yourself or the biggest ways you growed were?
On the one hand, I built confidence that I was playing against literally the best players and being able to match up against them.
I wasn't getting destroyed, playing against Scott Siever and whoever were the best players at the time.
So that was good.
But on the other hand, like...
I could see that I was lacking certainly like the emotional resilience.
You know, I wasn't like a tilt monkey or anything, but I certainly like needed to learn how to
handle swings and keep a cool head. And it's quite emotional. I mean, you can imagine if your
life depends on you winning and you start having like a bad month and you know, you don't have years of
expenses saved up, it's extremely stressful. So you kind of start tackling your, uh, your, your,
your, your darkest, uh, fears, I think. Yeah, it can definitely relate to that. Um, I've noticed that,
like, you know, a lot of traders that played poker before trading, like they, they're able to get that sort of
tilt management out of the way in poker rather than in trading.
Like, you know, it is one of the deadliest sins to have is this like, you know, you make a small
mistake, a compound is the bigger ones, you tilt, and then you like, boom, you just blow off
like half your portfolio, rage trading. I do find that like poker players have,
have that, you know, they've been through the cycles there more often.
Yeah, there's a thing in psychology that's called the belief in a just world.
And some people have like a very strong belief in a just world.
Most people, I would say.
And belief in a just world is that the outcome is justified.
So, you know, you...
You got hit by a car.
You know, well, you, you know, you probably did something wrong.
You got, it's kind of a way of thinking that is inbuilt in us, I would say, a lot of people.
But in poker, there are times where you, you know, you clearly did the right thing.
You put your money in good and you still lost.
And it's undeniable that it's not a just world in a simple way of thinking.
Like that doesn't work.
And so it kind of does start to train you to just accept that bad things happen to good people and bad things happen when you do the right thing.
And you can't control randomness basically.
And you just make you much more comfortable with randomness.
I like that because in poker it's like you know it's very clear when you got it in good and it just didn't work out your way
Like if you have aces you go all in you lose the Kings
So it's like you can't do anything about it but like in trading
So you never have all the knowns it's like there's always unknown unknown so you're never quite sure did I make the right decision or was I just missing something you never get that sort of feedback loop to be okay with losing after making the right decisions. I
Yeah, and there's even more factors in trading, of course.
Like, even, you know, how you might make a trade, but how do you, how do you size it?
And, you know, like, there's so many elements that have to get optimized.
And the unknown unknowns are everywhere.
Yeah, that's fair. I mean, in poker, like, you can only bet as much as you have on the table, but in trading, you can bet more. You can bet your entire stack and more with the leverage. So the sizing space is like a lot larger than in poker.
Yeah, exactly. The sort of Kelly criterion adjustment you need to make.
Yeah, is hard because in poker, you know, you play a tournament or a cash game, you're going to lose whatever you have.
If you're trying to trade directionally and, you know, you think worst case, this is going to go up 2x.
So if I short it and it goes up 2x, you know, I'm going to lose a thousand bucks and then it goes up 10x.
You start dealing with a probability distribution that, you know, maybe it wasn't Kelly Criterion approved.
Right.
Yeah.
So, I mean, see, you mentioned that like you were, I don't know if you mentioned the space, you mentioned to be separately, but you were like in Miami trading, it was like, you know, post, it's like 23 to 25, 27 or whatever.
You were in a house, a group of guys all playing poker.
How much do you think that helped you being surrounded by like people that were like doing the same thing as you and like fighting the same battles?
Yeah.
Oh, I wish that I was in a house.
You know, there are these houses that you speak of.
I was not in one of those houses.
Oh, you were alone?
Yeah, I mean, I was like living with a girlfriend, and there was, like, very little help from my environment.
It was a bit of a solo task, I would say.
Of course, you make friends in poker, you know, and you could still discuss things.
But, yeah, I didn't have that.
you know we're all grinding all day together and supporting each other kind of thing which i've
seen other people have okay was it tough on your relationship at the time um maybe um usually not
you know i was i was doing quite okay so i don't think i don't think it affected anything i didn't
really like have like a really bad drawdown necessarily uh during that period the only time i had a
bad drawdown was after we had a breakup
And at that point, it's not going to affect the relationship,
but the relationship's already over.
But I think I was...
At that stage, maybe it was a formative stage where you're kind of like having to play this game that requires you to not tilt and be like emotionally, you know, very neutral.
And then at the same time, your life is just not like, not, not a reflection of that.
So that was like a real, real challenge.
That's like a tough lesson that's like hard to learn is like kind of like recognizing when you're not fully yourself and just keeping yourself away from the table.
Yeah, I mean, you know, in essence at that point going through like a really bad drawdown and playing stakes I shouldn't be playing.
How bad was a drawdown?
I mean, I lost most of my bankroll.
Yeah, you know, like...
like 80, 90%.
I mean, I played like, I played super nosebleeds, took a bad beat and just tilted and, you know, just, you know, blasted more.
I didn't like get it in bad in general, but I was just playing way too high with the variance was going to result in that.
And, you know, I was.
Around how large was your bankroll at the time?
It's like, you know, 400K, something like that.
Okay.
Nothing insane, but certainly was, it was painful.
And, you know, getting into that depressive period where...
everything's going badly in your life and you've you know you had like a long-term relationship
and your your like financial security is gone um you don't know what you're doing with your life
because like you know you've kind of been investing years into a profession that doesn't really
have you know you're not getting promoted to senior poker player you know there's no uh
there's no ladder necessarily you invested in um
I think I had six months that are, you know, going to be probably the hardest of my life where just a lot of, just a very dark place.
And I would say that that's being thankfully one of those make or break times.
And it ended up being a blessing, you know, just having that time to introspect and just deal with so many demons I had growing up.
Yeah.
You either kind of find your peaceful self and your Zen self and you get over everything and you start growing or you just get stuck.
And, you know, unfortunately, definitely like a lot of people get stuck.
And in a parallel universe, maybe I would be one of those people.
But, you know, I had some good friends and maybe just had some inner resilience that came out in those tough times.
And I guess like that, so this was like 2010, 20, like around 2010, 2011, like around that time.
This ended up being a point in my life where I also just decided, you know, okay, poker was fun.
I want to get back into like the real stuff, not just the game.
So I, you know, started taking steps to turning things around.
Got it.
So, like, in 2010, after they banned poker in the States, like, what did you do next?
So, you know, you could still play in other places.
You know, there were other sites and stuff to play.
So I was still dabbling and doing a lot of sports betting.
I was focusing on tennis and basketball.
And at the time...
you know, all the software wasn't that advanced and you could really, if you were quick on your feet, you could, you know, trade life and I did a lot of betfair trading, you know, live, live betting, stuff like this.
That ended up being another feather in my hat later as a trader, not just having all the poker stuff and, you know, that stuff, but then having like live sports betting, I have to believe that that added some intuition.
you know, for probabilities and kind of seeing,
I feel like I can see probabilities,
like distributions from your like colors.
Like I just see, it's like a language.
It feels like innate to me.
And a lot of that was being built around those years.
So I was doing that, but at the same time,
I applied for an NBA, which was thankful.
I, you know, I got into a top school.
And it was quite unusual that they accepted a professional gambler when everybody else is like a BCG consultant or something.
But I got into one year school.
And 2012, I did a school year in Singapore.
I went to school called Insihad, which is a really nice NBA school.
and just got experienced by being around all these like professional finance people and professional
entrepreneurs and all you know all these kind of people um and going back to like learning through
osmosis and just seeing what people out in the world are doing yeah what prompts you to go to
singapore i was kind of done with uh anything u s west i just got a bit felt like they didn't really want to
stay in the US. I just wanted a new experience, something foreign, something different.
Never really, like, you know, traveled around Asia much. And yeah, it was, it was fantastic.
Obviously, I've since moved here full time. So clearly, it was a year that left me with, you know,
a desire to return. It was really nice.
When you applied to the business school, like, did you write something in your personal statement
about, you know, playing poker?
and playing games in general.
Yeah, I mean, they definitely took a while, like a flyer on me.
And I had to write these essays explaining how my training in poker is going to be relevant to what I would do next.
And I didn't think I was going to be a trader. I thought I was going to do some kind of strategy.
consulting or something strategy related.
I thought that the strategy element was going to be the one that would be like the common theme.
But then by the time I graduated and I was doing all the interviews,
you know, they get all these on-campus interviews and everything.
I tried to apply for strategy consulting.
But it turns out that they didn't really want to hire somebody who –
wasn't like a suit and tie kind of guy and who was a t-shirt kind of guy.
They wanted somebody who was just like, yes, you can do the work, but are you, do you fit the part?
And the only job offers I was getting was like from hedge funds.
It's just like analysts.
I mean like trading. I mean, basically trading was the only thing offered to me.
I didn't really want to be a trader, to be honest at that time.
I thought it was too similar to my previous life.
And I would just be back at playing a game, you know, I'm back to like,
Just sitting at a desk and doing the, you know, doing probability, just doing what I've been doing my whole life.
I wanted to get out there and do something entrepreneurial, but the only job offers I was getting was like trader, you know, like that.
Those people love the poker thing.
They love the poker players, though.
That was their signal.
Yeah.
Yeah.
So that's actually like the time I read Market Wizards because, you know, like I was getting approached by this, especially it was like big hedge fund.
Yeah.
the guy like sat with me at coffee and he's like look you have the profile like you're like i can tell
you're you know you're a traitor and read these books and read the market wizards and he gave me
like his copy and so i you know i sat and read it um and uh yeah i mean it was obviously like tying
into my skill set i ended up
accepting my fate at that point that, you know, I was going to be a trader.
I ended up doing something unusual, though, instead of taking the job with him,
which was like a discretionary trading, like a, you know, long short discretionary,
I ended up probably because I wanted to move to London.
I took a job at HFT, which was very strange, given that I had no coding experience.
and even like the quant side.
So you need two things.
You need to be a good coder.
And you need to be like very good at statistics, you know.
I'm good at math in general, but my formal training on, you know,
like lasso regressions and all this stuff was, it wasn't something top of mind, you know,
after years of just playing poker and stuff.
So I would say that I was severely underqualified for being an HFT trader.
But the same thing where, like, you know, the CV with the poker and being able to interview well on like any kind of game questions still got me the role.
And I just said, look, everything's becoming more algorithmic.
I can either stay in the past and do some of this discretionary stuff or I can try to go towards the future and...
So I accepted the algorithmic trading role.
Interesting.
You were trying to be more forward-looking and not just be a discretionary PM and a hedge fund.
You wanted to, I guess, dip your toes more into something more future-proof.
I think it wasn't like the heyday of HFT, but it was kind of like the heyday of HFT, but it was kind of like the middle period.
Because if I remember correctly, like people are printing the most like in the late 2000s doing HFT.
But it was still juicy in 2010-2012.
I think they've been juiced.
I mean, it's still the heyday.
I mean, people are printing throughout.
It's just at the time, there were not many firms.
So if you were in the space and you were kind of dumb, you still had like one of the, you know,
a few seats at the table.
And it was crazy because I joined what at the time was still the top firm in the world called get-go.
This is before they...
merged with night and then eventually virtue and all this stuff.
So they don't exist anymore.
But at the time, they had the top technology.
And I remember my first day showing up, my boss was like,
Yeah, so just, you know, make a model trading like Euro versus dollar and you can just put whatever parameters you want.
It's going to make money.
Like no matter what you do, it's going to make money basically.
You can make the most retarded number.
It's still going to make money because the tech was so good that, you know, the speed and everything else that you just had an advantage.
So sure enough, I mean, I put something in and it was just, yeah, it's making like $100 a day or something.
Gotcha. Back then, it was just like apes, click trading currencies just like they do in crypto now, right?
You don't really know exactly, like, especially when you're in HFT, you don't really have a great fundamental understanding of where the flow is coming from exactly.
You're much more focused on, you know, the technical side of things. And at most, you're starting to focus on
economic event releases and statements from the Fed, chairman, and like all this kind of stuff.
But you're not really like thinking about, you know, is this some, uh, somebody trading on some,
you know, platform like an E Toro or and you don't really think about that.
Okay, fair enough.
What were some of the, uh, like what were some of the metagames in HFT when you joined?
I mean, look, I was definitely out of my comfort zone.
Before joining, I was told, OK, here's an offer,
but you have two months to join.
You should learn Python.
So I just went online and Googled, teach me Python
and tried to get through some exercises and stuff.
I showed up.
I was still pretty weak.
Yeah, I had to find other ways to contribute because I was not going to be the guy like, you know, scripting all this stuff.
Thankfully, I did have a reason to exist because all these guys in HFT are very good at coding and being technical, but they don't really have a sense for, you know, markets.
It's not something that...
you know,
is being looked at.
And I just started finding
all these like really basic
improvements like,
Okay, this model seems to make money every day.
It's just like pure pattern recognition.
Like, oh, between 4 and 5 p.m.
And like, you know, some of these secrets I should have kept myself.
I didn't realize like how hard it is to spot them because they seem so obvious to me.
Like, like, you know, when you were trading Urex, that last like 45 minutes before Urex closed it,
especially like on the, on the Bunbobble Shats markets, there was just like amazing flow.
I guess because people were closing at the end of the day and they were just crossing whatever.
If you realize that, you could just size up, you know, by like a 5x and just spend a ton of money.
And this is the kind of stuff that I would just realize and start adjusting our models that
nobody across the entire HFT space
was even thinking about this kind of stuff.
And I remember I mentioned it to like a friend of jump
and then years later he's like,
yeah, you know, you shouldn't have told me that
because I ended up, you know,
making like millions and millions of dollars.
Yeah, I guess I was like uniquely good
for the being in that space.
And I don't think I was like uniquely good in the world.
It's just like...
everybody else who was thinking like me wasn't being hired by an HFT.
So I was just like in a foreign land.
Right.
I mean, I don't know if you had the same experience,
but I felt like there was sort of three prototypes of builds at an HFT desk.
One was like the French or Chinese quant.
It was really good at statistics.
One was like the, you know, developers, developer,
really good at low latency tech, understood the systems very well.
And in the other words, like,
Yeah.
And the last one was like, the guy was like decent, is okay, good enough at coding and statistics.
But like it's really just like there for like markets, intuition and just like understanding what an edge is and how to monetize it.
Just like the trader's trader.
Yeah, yeah, you need a trader's trader.
I think at the time, there weren't that many of them in HFT.
They were still doing discretionary stuff.
So, you know, I did end up adding a ton of value and a ton of P&L to them.
My team was the highest performing team at GECO.
We were like four guys and we kind of crushed it.
I basically did some crazy stuff.
I mean, I took over the desk.
I was switching off the models at times.
I was betting on some mean reversion spots,
like crazy stuff.
Nobody does it.
This is like insane.
What are you doing?
You're turning off the model.
I started realizing that there was spots where,
US and Europe would diverge and reconverge every day.
And I would like manipulate the models to do what I wanted them to do.
So my boss had to like pull me aside and he's like, you know, what are you doing?
But at the same time, like, you seem to be making a ton of money.
So we agreed that we would do an A-B test where I would take all our models, make another
version, split the size in half.
So, you know, instead of doing 10 lots, they would each two lots, and we would just have
two versions.
And one of them would run by itself, just run normally all day.
And then the other one, I would get to, like, manually just keep adjusting whatever I was
doing.
And we would see what happens.
And I guess I did have some pattern recognition ability because, yeah, just over months and months, it was outperforming about like a three act.
So we ended up kind of moving the size to whatever the hell I was doing.
Yeah, that was a wild time.
I noticed that like in the HFT world there is a general skepticism towards people that discretionarily trade.
There's just like a skepticism that like do they actually like is there actually edge here or are they just getting lucky?
Like how do you measure it?
It's so like nebulous.
How did you sort of counteract that at your time there?
I guess like your example you just said was like you had to prove to your boss statistically that your decisions were making money.
But like did you have a theme of trying to fight against that?
I mean, this was the only way that they would agree to it was like a long statistical AB test.
Otherwise, it was like, yeah, maybe what you're doing is good, but we don't really know.
So managed to do it this way.
First started with small size and then ended up kind of doing the big size.
But then I got to see a lot of stuff that influenced me as a manager later on, which was
just really bad politics.
First of all, you had a firm or the founder of trying to cash out.
They had made too much money.
They wanted to IPO the company and retire.
Great, great guys, like these Chicago guys that found Gecko,
but I think at the time, they were just like, okay, we've done this for a long time.
What's our exit?
And the bonuses, they were paying were kind of shitty
because they were trying to get the numbers good for,
you know, there's their stock debuts and everything.
They did a reverse merger with Knight, who had a big blowup.
And you could just see the culture fall apart.
And you could see that when the top traders don't get paid properly,
they start leaving.
So people start going to other firms.
And it was really interesting because so many of them went to Tower.
And even me, I ended up going to Tower as well.
And Tower is this funny firm where, like,
The only Alpha Tower has is the compensation model.
And it kind of showed how important, you know,
like how you structure compensation is.
They literally were the only firm that was doing this profit sharing
with all the different teams and pods.
And so they just ended up getting all the talent
because the top talent of every firm wanted to get a profit share.
And that was something that was eye-opening.
Yeah, I mean, I think, like, you know, people in crypto are very, they understand the power of incentives very well.
But at the time, it wasn't as well understood.
Yeah, yeah.
I mean, it's huge.
Incentives are, I've been writing this for years, but incentives are everything.
Yeah, like, like in an organizational level, like, you know, employing someone or working under someone is like a trade at the end of the day.
Yeah, yeah, yeah.
I mean, especially, like, if you think about your time as being a, you know, a limited resource and you have to think about it strategically.
And, like, yeah, if it's an organization of traders, like, they're obviously going to, you know, treat every, like, treat who they work for, how long they work, how hard they work as a trade.
Yeah, yeah, they're going to see, like, you know, if I stay up late and do the extra hours, is that going to matter?
Like, is that going to impact my...
my bottom line enough. So, you know, it's helped me design things later on and, you know,
now running a firm and having a lot of talented people, having to think about these things and
take all the lessons. It's easy to get it wrong. So I've been experimenting with more and more
kind of smart ways to incentivize, I guess. But
So yeah, that was the next step.
Once everyone started going in tower,
I ended up doing that as well,
joined a small team that left Gecko.
And that was interesting because you went from a place
where everything was already built up.
The type was super mature, you know,
had been built for many years, everything was working.
And then suddenly you're in a place where there's a bit of stuff,
but you're really just, you know,
it's kind of more bare metal is,
you know you you have something but it's it's it's nowhere near the level of uh you know
sophistication there's a lot more debugging and you have to kind of just make money and that was like a
place where it didn't it did matter what you put in like it wasn't going to make money unless you
really dialed it right and you really got it um you just have to like figure out how to be mcgiver
and just put together like a wire and you know like a tennis ball and and just make it make money
what did you trade fx a tower
So it was fixed income.
So, you know, bonds and like rates, all this kind of stuff.
So it was mainly fixed income.
We did start expanding it to other stuff.
So I got a dabble of, you know, trading oil, trading a little bit of FX.
But it was mainly fixed income.
So, yeah.
That was useful as well. I ended up building a very good understanding of the fixed income market,
which is probably the most important market in macro.
Would you say you learned a lot of your macro knowledge you have now from trading fixed income at Tower?
Yeah, at Getco Tower. At the beginning, all we were doing was just putting on the drogy and the Yellen press conferences.
And you just...
read the Bloomberg articles and try to understand why the markets were moving.
It didn't really matter too much in terms of the stats and the algorithms you were running,
but it mattered for understanding volatility regimes and when they were changing and when you had to like change your models and stuff like this.
And, you know, why did we make money or lose money today?
So you started just being around it, just being steeped in
these conversations around the central banks and what they're claiming to be doing.
And it was interesting years, especially in Europe.
I mean, Draghi was doing a lot of crazy stuff.
So that was useful.
The team that I was on, fresh team ended up doing quite well.
I mean, you know, the numbers are...
all relative, but let's say like, you know, first year, we already made, you know, eight figures,
which most teams can't really start off that well. It takes, you know, sometimes much longer.
So I was there for two years. The team was doing extremely well. But I felt like, you know,
I was contributing a very large amount of that growth. Like my models were
really driving a good amount of it.
But I wasn't a portfolio manager.
And I think that that was kind of the point at which I had to decide if I wanted to take a big risk in my career and just bet on myself to start something versus joining something established.
And it was a bit scary because I'm not technical.
Again, like,
still don't really have great coding skills, even after all those years of HFT.
So you think you kind of understand the trade and you do, but you don't really understand the full tech stack component.
And it's not something that I speak the language of, you know, like other people are much better than me at really understanding the whole tech stack.
So that was a bit of a risk, I would say, that I did decide to take in the end.
So you started your own firm trading fixed income?
So I didn't start a firm, but I did join as a partner in a small firm.
And the, you know, one of the two founders, I had this really strong connection with where I felt like he didn't understand trading, but he was maybe better than all the devs I had ever seen at, you know, power or anywhere else.
He was just like such a great technologist.
And I had the other part.
So the combination would make us world class because, you know, individually we can do much, but together we could.
So I joined the partner and, you know, what was like a 15-person kind of small shop.
And, you know, they were trading some oil stuff and doing some like random trades.
But we spent six months building...
building something together, which has kind of become the basis of Seleney now.
We really built a lot of the code of the infrastructure back then.
So it wasn't fully starting my own company. I wasn't quite ready for that.
It was more like I'm starting my own team and I'm joining in a place where I have a lot of
responsibility, but not quite like I'm running a firm. I don't think I was ready for that.
How old were you when you started it or when you joined?
So I joined in 2016, late 2016, so I was turning 32.
Okay. And had you been familiarized with crypto at this point, or when does crypto start entering the picture?
I just started getting familiar with crypto because the firm was in the Bay Area, which is a very unusual place, but just because that's where they were living.
And, you know, I had to move there, which I didn't mind.
And it's the only place in the world in 2016 where, you know, you just randomly having conversations and coffee shops and people are talking about crypto.
Yeah.
I think Bitcoin was like a thousand bucks.
I remember, like, I thought it was expensive, so I bought some Ethereum instead because that seemed cheap.
And then I did my first, like, crypto-native trade, which was like I realized that, you know,
light coin would pump because it was only whatever, like, it was like some, I don't know,
it was like a few bucks.
I don't remember what it was.
But I realized that there would be this like normie unit bias.
So I just bought a bunch of this like light coin, ended up selling it at 250 when it just like went crazy.
So I was around it.
You know, some of my friends in the area were running like one of the first hedge funds doing crypto.
I see it was quite small.
But I guess like that was my first exposure.
What were your thoughts on it when you first discovered it?
Did it click?
I mean, I had heard about it in 2013 when it was like news about Bitcoin.
I think it had like this mini run and you you have these like Bloomberg stories about it back then when I was at the trading desk.
At the time I thought like making base money is hard and this thing is trying to be base money then like it's very small shot.
I mean gold makes sense maybe but like.
this thing is just you know too many people in the world have to agree suddenly that they
treat this as a store of value for their for their own wealth and it just seemed very far-fetched
at the time so i i heard about it 2013 did not buy um 2016 i guess like my reaction was like um kind of positive um
especially like
the fact that it seemed like there's these other coins and you know there's there's
there's some i i felt comfortable with the speculative element i guess
but i still wasn't thinking about bitcoin as a store value at the time
what was the like the world consensus view on fiat's at the time
i think like no one really
I questioned it. Obviously, we were in this artificial environment of low rates, but I think people were just happy to get out of the financial crisis and sort of get through unscathed after a few years.
I don't think there was like this big hoopla around Fiat at the time. It was more like discussions around the euro versus the dollar or this kind of stuff.
Got it.
And I guess when did your firm start trading crypto systematically?
So it's funny.
They, they, one of the other, so the other co-founder, he started.
getting a few of his entrance starting trading crypto pretty pretty soon after that and i did not end up
participating in in whatever they were doing but i remember you know they were
trading some of exotic exchanges and trying to do some arbitrage and then they
you know, would forget where the money, like, you know, the keys and the money, like, it was,
it was just like very wild west, you know, especially back then. I mean, like the exchanges would
lose track of, it was just completely insane. It's not like it is now. Uh, the professionalism level
of the exchanges was awful. Um, but for me, I was just doing it on the side and I had to kind of
agree, uh, not to spend like too much time on it. So, um,
I guess like I got familiar with the markets, but I wasn't full-time on it.
And part of the reason was just it was going so well on the fixed income stuff that
it was going to be a big opportunity cost to divert my attention.
And there were many, many nights that I stayed up thinking, like, should I just try to do crypto instead?
But it was just, it was too much of a cost at the time. I wish I did and I had more of a head start.
But I ended up wasting those years. And I felt like a genius in like 2018, 2019.
You know, I thought, yeah, thank God I didn't drop everything to do crypto, but I'm doing great and crypto is dying.
But it wasn't until 2020 that I personally started doing it more seriously.
Up to this point, correct me if I'm wrong, it sounds like you mainly use your discretionary understanding of markets to play defense on the market making side.
And you didn't start playing offense to the discretionary side until later on.
Yeah, the discretionary thing is really funny because, like I said, when I started HFTE,
I was doing these discretionary overlays, which were not encouraged by the firm, but at some point
it kind of just forced it down their throat because it was just clear that it was working.
So they kind of accepted it.
I actually felt like the most exciting thing growing up, you know, in my 20s was being a macro trader.
I remember like staying up and reading these blogs and these like...
I remember what the name of the website is.
There's like this Wall Street Oasis kind of stuff or whatever.
Like people.
I remember those forums.
These forums.
And like the guy talking about the macro, it just seems so fascinating because he wakes up really early.
He has to catch the Asia and see this and all these markets.
And it just seemed like such an exciting like.
problem to be in. Like you're so many factors and it just seemed so fascinating. And you know,
here I am running algorithms that are just, you know, printing a few cents per trade a million
times a day, which is fine. You know, it's great. But what ended up happening is, I started taking
some of the profits from from my desk and starting to like put on
like just macro, just just just just moving it to a separate account and just trading just fucking just taking directional, you know, bond bets and whatever equity bets like, you know, index index equities and and bond bets.
And sometimes the volatility will be high. I remember like the first time.
my special side account lost 100K.
There was some non-farm payroll number.
It came the wrong direction.
And I couldn't believe how much it moved in the wrong way.
Because that was maybe my first 100K loss.
You're not used to taking losses when you're doing HFT.
And that got noticed by the other two partners.
And got some comments.
But my response was like, look,
I'm playing with some profits.
It's not a huge percentage of the profits.
Again, I had to just make the case for it in an environment where it was not welcome.
It was not desirable to be doing discretionary trading.
But I was very drawn to it.
I felt like I wanted to level up and I was getting somewhere.
So this kind of continued and it kept getting bigger and generally was going well.
So I did this for 2016, small side, 2017 bigger.
2018, I would swing hundreds of thousands.
And 2019, maybe swinging half a million.
2020 was like a defining year for my trading career.
I would say that that's really where things got a little bit wild.
How come?
I mean, anyone who was trading that year, you know, the COVID shock to the market.
Obviously, we had this February, everyone's pretending like everything's good, nothing's happening.
Markets are just, you know, brushing it off.
And then suddenly, like in March, you just get...
moves that are multi-sigma moves.
I mean,
they're calling them like eight-sigma moves,
which is pretty funny.
You know,
like,
obviously, like,
your probability distribution is not normal
if you're getting eight-sigma moves.
But you're getting some crazy shit,
which made no sense.
Like,
things were blowing up left and right and people that are you know professionally putting on trades
like basis trades between let's say like the the futures and the spot right um if you're doing it on
bonds you are just facing like insane dislocations at some of those points where i think citadel
the entire citadel would not exist if uh if griffin didn't call paula and like ask the fed to like you know
fix it
They were probably a day away from the entire Citadel not existing.
That's how bad.
It literally was that bad.
They had to get a bailout.
Otherwise, they would not exist.
I mean, their margin call...
They were blown up.
Completely blown up.
Completely blown up.
Wow.
Yeah, I think they've kept that secret.
But being in the books and you could see what was happening and then you heard it, you
knew what was happening.
I mean, just like nonsensical pricing between...
you know, butterflies and things that normally like have a very fixed structure in the income,
fixed income curve, just completely broke. And there was no liquidity. So you couldn't even get out.
I mean, it was just a wild time. And I think at that point, like having a discretionary
skill set, it kind of saved the firm.
We, we, you know, like, we were in a spot where, like, one of the,
anyway, I mean, I can't get into too many details,
but let's just say that, um, there was a need to do well that,
you know, especially like March 2020, um,
There was a need to do well on my side.
Otherwise, there were some things not working very well.
And at the same time, you know, everyone's worried about their family, their health, you know, everything's getting shut down.
Like, there's just like probably the most stressful month, I think, for a lot of people, including myself, having to work while at the same time, you know, just thinking about.
Remember, we didn't know what the virus was and how serious it would be.
People were dying.
It's all we knew.
I ended up grinding that entire month, like nonstop and found some trades that I think worked,
but are also very useful for the market.
It was like basically providing passive liquidity for
for some of these like long long term like long end bonds there was literally nobody in the market
i mean there were no bids there was like no if you look at the books in like march 2020 on
c m like on like zb u b z n like there's nobody there and it's probably just me just putting on like
these positions and trying to manage it and uh
just printing money because, you know, nobody else is willing to show anything on the books.
So I ended up, you know, having a very, very big month for, like, you know, career high kind of months by the factor of 10 or something.
So, you know, I guess they kind of like made me believe in myself because just the amount of challenge that that specific month was and sort of surviving it.
And I guess like, you know, also making a good amount of money, which I then used, you know, later on for growing the firm.
Right. I mean, the discretion on overlay seems it really is vital in these disaster scenarios where like nobody knows what's going on.
You just need to have like a common sense head on your shoulders and do like the simple thing.
That makes sense.
Yeah. I mean, you have to be willing to try something if it works, scale it a little bit more, you know, just.
Yeah, it's like standing on quicksand.
You have to just keep jumping around and figure out what to do.
But yeah, that was a defining month, I would say, both financially,
but also from like a self-belief kind of side.
Right. I guess the market reaffirmed you that, like, you were doing the right thing,
putting on this discretionary overlay onto your systematic strategies.
And I guess also, like, you had more...
um I let's skepticism in your own firm that like it was working yeah definitely I mean
there wasn't really like a choice I think at that point you know everyone was just
just chaos and just hoping that everything survives thankfully
Got through that.
The rest of the year was good.
I think everybody had a record 2020 in most HFT firms because after,
if you survived, there were some firms that just, you know, blew up, disappeared.
There were quite a few.
But if you made it through then, like for the rest of the year,
the flow was just, you know, very good.
It was just, I don't know how to explain it, but it was just very good flow.
So, you know, 2020 was a very strong year for a lot of trading firms.
And the other thing that happened is like the one thing I got wrong that year in discretionary,
and maybe I gave back like 10 bucks or something, which was not fun.
Still had a great year, but like, you know, that was not fun was, I had certain deep understandings
of how the economy should function in this kind of environment.
And I expected certain things to happen, like high yield bonds, risky bonds,
should lose value because the fucking world economy is blowing up. And, you know, there's a lot more
risk in a company paying back its debts if the world economy is blowing up. Like, that seems like a
reasonable assumption, right? Yeah, well, the Fed decided that they're just going to buy all of them.
And it's like the referee, it's like you think you're playing basketball and the referee just like,
starts like taking the ball from you himself and scoring like baskets for the other team like stuff like
it's just like some some things were happening that that should not have been happening um yeah
thinky are you there brother i think we lost thicky again sticky is DMing that he's having connection
issue but wants to come on while we're waiting got a lot of friends here uh anyone want to
want to want to come chat while we're waiting for thicky to reconnect salsa you want to come up
