The Way of the Ape
Some advice for the next generation of apes
The decentralized frontier is a complete jungle and it’s easy to get lost. There are dozens of chains and thousands of dApps to stumble through on your search for financial freedom. So much noise, so many coins, so many rugpulls, how does a humble ape navigate and approach it?
Note: I did not proofread this at all so whatever is here is literally just off the top of my head. Also I barely even follow half of this advice myself, so wanted to just get it down for future reference. Anyways, here is a bunch of random advice from an ape, for apes. Bullet points as usual. Enjoy frens.
Crypto is Ape-to-Learn
The more you ape the more you learn and earn
Best way to get started in crypto is trial by fire. start learning by using everything
Want to build a thesis on a new Alt-L1? Bridge and use it. Want to build a thesis on a new trend like DeFi options? Try all of the DeFi options protocols out there and compare them
By using dozens, then hundreds of protocols and dApps over time you will be able to connect the dots more efficiently and see the bigger picture and develop macro theses on the space
Always check biases, your biases and other people’s biases
Jon is shilling Cosmos ecosystem? Why? Does he have bags? What is his motivation? (for you to buy my bags duh)
More critical thinking, ask why and how more
Just assume everyone has an ulterior motive until proven otherwise
Everyone is shilling you their bags
Narratives are just narratives. Use them to your advantage but don’t take them too seriously, and most importantly of all, do NOT get attached to them.
You should not be here to marry bags. You are here to hit and run, smash and dash, shoot and scoot.
Reserve bag marrying for builders and long term investors.
At the same time, respect the builders and long term investors, these opportunities and industry don’t exist without them. They also probably outperform you anyways lmao
It’s almost all just speculation in the end. Are you here to make money or are you here to join bagholder cults?
Know your counterparty, know your exit liquidity, know if you’re the exit liquidity
Overextending yourself is not productive
If you skim only the surface you miss all the alpha beneath the surface
Everyone says manage your time but more specifically you should be optimizing your attention
Read, read, read
READ THE DOCS
Stop asking to be spoonfed and starting using google and twitter search bar
If you can answer a question with a 2 second google search why tf are you wasting your time and other people’s time asking that question? It’s inefficient for both you and them. You could’ve saved time by just asking google directly without the wait time in between.
Garbage in, garbage out
Manage your mental bandwidth like your portfolio. You have limited firepower so allocate accordingly to the best information, resources, and people
Don’t let others directly change your decision making or thesis, accept the outside viewpoints as new information to consider, if it’s baseless discard it, if it’s high signal then listen and adjust accordingly
So much information comes in every day between all the charts, twitter, discord, telegram feeds, group chats, find a balance, know when to chill
Avoid confirmation bias
Already pumped syndrome - don’t fade something just becuase it’s pumping, it’s probably pumping for a reason and most narratives have multiple legs, most of the time you aren’t late
Assume everything is being frontrun or already frontrun by insiders when trading news based events
There is always a new way to make money/capture alpha so no need to fomo one if you missed it, move on to next, keep searching, stay open
Know when you’re early or late, allocate and risk manage accordingly, this takes time and many losses to learn
Fill before you shill
Say yes more often
See tweet about new protocol on different chain? take 1 minute to skim, maybe it’s nothing, maybe it’s the next 100x, all it takes is one read to find the next banger
You will have the instinct to buy weakness instead of strength because it’s cheaper, understand it is weak for a reason
The real alpha are the people
Find community, mentors, frens, people to bounce ideas off of
Interact with other people in similar position
Find your tribe
You will come to the point where you can’t keep up anymore by yourself
Outsource research to friends, split up ecosystems/verticals to research
It’s always more fun to be making money with friends and making it together
Always more bearable when you lose money with friends as well
You need more human interaction, crypto is very isolating if you don’t put effort into building relationships
Dealing with failure
Live with no regrets. Reflect but do no not regret
Regret is like hindsight trading. There is nothing you can do to change the past. So focus on how you can improve the present
Learn from mistakes (duh), but more specifically learn how to identify mistakes.
Your failed trade thesis/execution prob isn’t completely wrong, just flawed in smaller aspects that impact the end result. Find them and fix them.
Losses are lessons
Treat losses like a fee you’re paying to the market to teach you. You are paying for your education
Sunk cost fallacy - the only things that matters is what your coin’s price is at this moment and what you do from here.
Normalize cutting at invalidation and taking the loss, breakeven is an arbitrary number that is overused in most people’s decision making, not caring about breakeven is an edge in itself
If you’re down 50% you need a 2x to get back to breakeven. Down 90% needs a 10x
Market doesn’t care that you’re down 69%
Don’t be a salty bagholder, if you’re salty then sell, it negatively impacts your decision making if the coin makes you emotional, could get even worse
Do not revenge trade, the market owes you nothing
The more emotion inserted into a trade’s execution, the more likely it is to fail
Don’t blame anyone or anything for bad trades, think about it as probabilities not working out or you miscalculating the probabilities of the trade. Fix your system and move on
Know when thesis invalidated
Have a thesis before even touching the green button
No thesis? No trade
Can be something as simple as entry, stop, target
Have an invalidation and stick to it
Allocate to your conviction but make sure your conviction is well founded
Hold strong convictions loosely
Probabilistic thinking for position sizing
What is the probability of x event and y event, how should you allocate accordingly to maximize those probabilities and minimize risk
How much are you willing to lose
If you go all in and get wiped out you’re out of the game, never be out of the game
main objective survive
managing too many positions is unproductive
House money fallacy - after a big win it is NOT the time to allocating further out the risk curve, profits
You will feel fomo whenever you aren’t in a trade, recognize it and fight it
Cash is a position
You don’t always have to be in a trade
Don’t be afraid to lose money
Don’t feel pressure to ape entire position in one market order. What if it dumps under your entry but you have no more to buy with?
Compound gains, compound rotations, compound narratives
In the end, a trade is just a combination of variables
Control for as many of these variables as possible to make it easier to identify mistakes and easier to replicate if successful
Narrow down as few decision as possible so you don’t screw up the execution
Less decision means less points of failure
Indecision and hesitation on execution is a failure in itself
Trust your system and adjust it if it’s wrong, but stick to the plan on execution
Know the difference between luck and edge
A trade with bad execution can still make profits, these are the most dangerous ones, more dangerous than losing trades even. You will go into the next trade thinking you’re a genius and get railed by the market
When to Sell
This deserves its own section; it’s the most common execution failure
Every trade should have an invalidation
Price hits your stop loss? Catalyst doesn’t have the impact you expected? Cut cut cut. Stick to your invalidation
Is this your original target? Then sell, stick to the plan
Is there a high opportunity cost in staying in this trade? Sell and rotate.
When you opened the trade would you have been happy to close at this price? Yes? Then take some profit
Good enough to screenshot = good enough to sell
you don’t have to sell the top to make fatty profits
If you’re calculating your networth thinking about what if x coin hits y price, then it’s time to take profits
If everyone is talking about it on the timeline, it’s time to take profits
Sell when max hype, think about who is left to shill to if everyone is talking about it, this is why airdrops peak within first 2 weeks the majority of the time
Narrative fizzling out? Sell and rotate.
Aped on a Hsaka tweet but no Hsaka tweet about it for a week after? Sell.
Can’t sleep at night thinking about your position? Sell some, you have too much.
If you’re uncomfy then you’re overexposed, sell some
The goal is to be able to vibe whatever direction market goes.
In an efficient market no one has an edge
Recognize when its a PvP vs PvE market
Before you open a trade, ask yourself if your setup/thesis has an edge
Any trade is basically you betting that the market in its current state is wrong and you will be right in the future. Do you have an edge?
If you have a proven edge, just keep executing on it and print, don’t go out of your way to do stupid shit just because you get bored
By becoming more systematic in your trading/thesis construction you will be able to identify if you have an edge over a large enough sample size
Which comes back to the point about decreasing variables in your execution so you can identify if you have an edge
You build edge by becoming an expert
If everyone is doing something then it is harder to build an edge there (like charting) because it’s been mostly arbed out, try different areas
Being on chain you compete with much less people than trading on CEXs so it’s easier to develop an edge, whether if it’s rotating faster or bridging with less hesitation
Knowing when to ape on no research is an edge in itself, this comes with experience
If you have a legitimate information edge you should size much bigger bc you now have an advantage over the market
What is your end goal? Making money is a fleeting pleasure, establish more fulfilling goals
Be open to new ideas and new people
Bet on yourself
Prioritize relationships over profit
Would you rather be right or make money?
Go outside more
Take breaks from crypto in general, if you don’t take regular time away from it, it will consume you
The best alpha is how to think for yourself. all the friends, mentors, research, readings, all lead back to you being able to make good decisions by yourself
Opportunity flow is infinite, don’t get caught up on one if it isn’t working out, go with the flow
Optimize for comfiness
Gud alpha comes to those that read and vibe
Hopefully this was helpful and adds some fresh perspective to your journey as an ape. Wgmi.
*Disclaimer: Nothing in here is financial advice. No one will believe you anyways if you tell them you lost money after listening to an anime character for (NOT) financial advice.