Conversation with Traders: Exploring Data-Driven Crypto Assets Trading Strategies

In this issue, we invited Benson, the founder of CoinKarma, who shared in detail the evolution of his trading strategies during different market cycles, as well as how to use data indicators to guide trading. Benson's core idea is to build trading structures in a non-consensus manner, thus succeeding in the zero-sum game of the contract market.

1. Benson's Trading Strategy

1. Overview of Trading Strategies

• In a volatile market, look for positions with a higher margin of safety based on indicators to participate in the market.
• Focus on BTC capital inflow and exchange accumulated trading volume indicators to determine market trends.
• Over 60% of the positions are allocated to quantitative strategies for coin-based appreciation, focusing on holding and accumulating coins.
• Approximately 40% of the position is mainly in stablecoins, used for participating in on-chain transactions or initial contract trades.
• The trading strategy focuses on stability, with the goal of outperforming the market.
• Adopt different operating methods for different targets

2. Reasons for Strategy Formation

• Frequent stop-loss and chasing highs and lows in the early stages led to significant losses.
• Realize that market fluctuations are controlled by major funds, especially in the contract market.
• Start thinking about how to use data to follow the main players' operations.
• From 2019 to 2022, it was found that the funding rate has a significant impact on trading.
• After the Federal Reserve raised interest rates in 2022, the original trading system became ineffective.
• Start researching order book data and developing the CoinKarma indicator

2. Benson's Trading Indicators

1. Unilateral Market and Fluctuating Market

• Unilateral Market: Rapid rise or fall, short duration
• Volatile Market: Occupies most of the market time, fluctuating within a certain range.
• Determine through indicators such as the trading volume accumulated through the exchange and the net inflow of BTC ETF funds.

2. CoinKarma Core Indicators

• Overall LIQ(Overall Liquidity Status): Describes the market liquidity status and assesses potential price reversal points.
• CVD(Cumulative Trading Volume): Determine market conditions by observing the strength of market orders.

3. Determine Market Cycle

• Pay attention to external capital inflows
• Observe the download ranking of the Coinbase APP
• Check the view count of the Bitcoin page on Wikipedia

3. Benson's Trading Experience

1. High Win Rate Trading Mindset

• Understand the sources of market fluctuations and the logic of major players' operations
• Adopt a unique analytical perspective
• Adjust strategies in a timely manner to adapt to market changes.

2. Daily Trading Process

• Check the market liquidity overview in the morning
• Evaluate whether the existing positions meet expectations.
• Determine the direction of operation based on opportunity certainty.

3. Experience in Avoiding Significant Losses

• Avoid buying tokens in the same way as buying stocks.
• Timely take profit and stop loss
• Control Leverage Ratio

4. Operation strategies for different underlying assets

• Hold onto potential market hotspots for the long term.
• Combine technical analysis and fundamental analysis for large market cap coins.

Core Viewpoints

1. Contract trading is essentially a game of how to win most people.
2. Build transaction structures through non-consensus methods to outperform the market.
3. Align with the interests of the main players to outperform the majority of traders.
4. Keep an eye on market changes and adjust trading strategies in a timely manner.
5. Develop a deep understanding of the essence of the market, rather than just copying others' strategies.