Crypto Trader Extraordinaire Joe McCann Reveals Five Things Everyone Should Know About Crypto Trading
The main lesson from my recent eye opening 10 days living the crypto dream in Asia was that speculation is the killer app in crypto today. So I reached out to my friend, and widely respected crypto trader Joe McCann to give me additional insight in to crypto trading today, where it’s going, and why its different than anything we’ve previously seen. While he trades, Joe also posts in his wildly popular Telegram chat room JoesCrypt.
The12 minute video features the highlights of our talk:
My five highlights are below:
1. Crypto Trading is Far Different From Trading Other Assets
The Major differences that are most often cited include the fact that the crypto market is open for trading 24x7x365, and that there is no real advantage in shaving milliseconds off of trades like we see in other markets.
Joe believes the most important thing is determinism, and being deterministic about the orders that you’re sending and the data that you’re receiving back.
2. Because There Are No Fundamentals, Crypto Is The Most Formulaic Markets Joe Has Ever Seen
Because the only fundamental is price, the only tool you have is behavioral economics which can be applied via technical analysis. Joe highlights that there is no silver bullet in crypto trading, but Joe has never seen technical analysis be so accurate in forecasting market moves.
3. Crypto Traders Are More Likely To Play Fortnite Than Have An MBA
For the last 25 years, the typical Wall Street trader went to an Ivy League school before getting his MBA at Wharton. In crypto, Joe sees many more traders who are avid gamers. The best crypto traders are more attuned to Fortnite or World of Warcraft, which gives them a strong sense of how markets actually trade. For many, it’s day trading as entertainment.
4. The Funding Rate Is a Key Trading Signal
As explained by Deribit: The “Funding Rate” is the fee paid or received when a BTC derivative (similar to a futures contract) is bought or sold short. The funding rate is used as a mechanism to keep the price of the derivative close to the underlying crypto price. If the derivative trades higher than the Index, traders that are long need to make funding payments to the shorts. This will make the product less attractive to longs and more attractive to shorts and this will serve to push the price back down to the level of the Index. If the derivative trades lower than the index the shorts will have to pay the longs. Funding payments are calculated every millisecond.
Joe believes that when there are extreme outlier moves in the funding rate, they are hyper accurate in terms of finding short term market tops and bottoms.
5. Many of the best Crypto Traders Are Anonymous
If your exceptionally good at trading Bitcoin you may not want to advertise it. Joe highlights Thinking USD (Aka Flood) and The Boot as two of the best anonymous traders. The more traditional trader that Joe highlights is Alex Kruger.
I thank Joe for taking the time to speak with me, and I thank you for clapping (up to 50 times if you really liked it!).
