From losses to a profit of 6 million: the trading philosophy of top trader Benson

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Benson, who currently operates Coinkrama, a trader data platform, mainly analyzes market reversal timing from a liquidity perspective. At the same time, he is also a secondary market trader and once worked in data analysis for a large financial holding company in Taiwan. He was spotted by an exchange because of his articles published on the Internet, and has since entered the blockchain industry.

OKX specially invited him to be a guest speaker in the "Friends of OKX" series. We hope that his past experience and observations and thoughts on the industry can inspire everyone.  

The "OKXFriends" series is a special column specially planned byOKX, organized by< em>OKXOfficial Community AmbassadorMercy (@Mercy_okx) hosted by Discover the career stories, industry insights and lessons learned by KOLs with different backgrounds for learning and reference by novice users.

1. Recalling your first entry into the cryptocurrency industry

Mercy: What gave you the opportunity to enter cryptography? What about the currency industry?Did you start trading when you first entered the industry?

Benson: I officially entered this industry in March 2018. Prior to this, I worked in data analytics at a large financial holding company. Because I published an article on the Internet, the HR of an exchange saw it and became interested. It happened that I was also looking for new opportunities at that time, so I joined this exchange.

At that time, the exchange’s vision was to become the “Goldman Sachs of the currency circle”, doing both exchanges and ICOs, hoping to help underwrite high-quality projects like Goldman Sachs does IPOs. But the timing of my entry was not ideal, as it was at the end of the 2017 bull market.

When I first entered the industry, I was not actually doing "trading" in the real sense. I was buying spot goods. Many people suggested that I buy Bitcoin and Ethereum, thinking this is a low point. At the same time, I also invested in some ICO projects, including an ocean project in the logistics field. The issuer claimed that the ICO was very successful and would increase 60 times after listing. I invested about $7,000, and it all ended up being zero. I also continued to increase my position when Bitcoin continued to fall from 9,000 US dollars to 6,000 US dollars. Finally, when it was more than 4,000 US dollars, I completely lost confidence and cut off all my flesh, resulting in a total loss of more than 10,000 US dollars.

Mercy: After you resigned from the exchange, you chose to write articles. Has your understanding of the industry changed after this change?< strong>?

Benson: After leaving my job, I was indeed very disappointed and even considered going to a more mainstream web2 company such as Amazon and Google. While looking for a job, I started writing articles on Dongzhong, mainly criticizing blockchain technology. I remember writing an article called "Six Major Problems in the Implementation of Blockchain". What's interesting is that these problems seem to have not been solved yet.  

The real turning point in my career was when I discovered a stable way to make money - the BitFinex lending business. At that time, I wrote an article introducing how to lend USDT to others on the exchange to create leverage. After the article was published, it attracted widespread attention throughout the Chinese-speaking area, and many people came to the site. A group friend felt that the loan robots on the market were not good enough, so he developed one himself. And this is actually the origin of FundingBot.

2. Establishment of a personal trading system 

Mercy: Why did you choose to take root in the derivatives trading market? How was your methodology established?  

Benson:To be honest, I had no trading methodology at all at the beginning. You may think that I am good at trading from the beginning, but in fact I am more familiar with product structure, such as the design logic of perpetual contracts, the formation mechanism of market depth, etc.  

Later I discovered that due to the lack of fundamental analysis of Crypto, everyone generally uses technical analysis. But there is a strong reflexivity in this market - because too many people use the same technical analysis method, it leads to its failure. For example, when many people are paying attention to the head and shoulders pattern, the market often breaks this expectation.

As for why I chose the derivatives track? It’s because when I was paying attention to FTX in July 2019, I discovered that although the spot market has formed a three-legged structure, there are still great opportunities in the derivatives track. At that time, BitMEX, the leading derivatives company, had a daily trading volume of $10 billion in Bitcoin perpetual contracts alone. This made me realize that product innovation is the key to success in this field.  

Mercy: You once mentioned your experience of making millions of dollars from hundreds of thousands of dollars. What was the process like?  

Benson: In 2021, I started with US$300,000 on a certain platform and ended up making more than US$6 million. It was a bull market at the time, so this rate of return was not particularly exaggerated. After reviewing the market, I mainly judge the market sentiment by observing the BitMEX funding rate. When the funding rate drops below 0.01%, the market is relatively sluggish. From a bull market perspective, the long stop loss point can be set at this time. closer.  

In terms of spot prices, platform currency is my biggest source of income. At that time, Coinbase was about to go public, with a market value of nearly 100 billion U.S. dollars, while the valuation of platform coins in the currency circle was only a few billion. This valuation mismatch brought huge opportunities, and major platform coins experienced significant increases.  

However, as the Federal Reserve began to raise interest rates, the entire market environment has fundamentally changed. It wasn't until the first half of 2022 that I realized that the original trading method was no longer effective, so I chose to suspend trading. This also made me understand that I must always think about the circumstances under which my trading system will be effective and under what circumstances it will fail.  

Mercy: What is the daily life of a derivatives trader ? What kind of person is better? Suitable for becoming a derivatives trader.  

Benson: I think every trader’s habits are different, and there is no fixed model that can cover the behavior of all traders, but I can Share my daily habits.  

Every morning, I will first check the price of Bitcoin, observe whether the market is rising or falling, and then pay attention to the situation of the TOP 10 altcoins. Next, I analyze market liquidity and decide whether to place a trade based on this information. My trading decisions are mainly based on two factors: first, the price reaches a certain position, and second, the market shows a certain signal.

I am not a frequent trader. I prefer trading on the left side, that is, waiting for the right opportunity. At the same time, due to my relatively strict trading system, I usually only have 1-2 trading opportunities per week, and sometimes I don't even open a position for 2-3 weeks because I don't see any suitable opportunities.

3. Entrepreneurship and the current market environment 

Mercy: What prompted you to decide to create Now trading platform?Can you tell us what your platform is doing now?

Benson : The initial idea is very simple, because I am a trader who relies more on data and often need to look at data from many different sources. Some are on-chain, some come from spot exchanges, and some come from derivatives markets. I originally just wanted to integrate these APIs into a dashboard for my own use.

Later, when I discussed this idea with my friends, they suggested that I could commercialize it. Although progress was slow at first, after the FTX incident, I realized that I needed to take this project more seriously.

Our platform mainly provides liquidity analysis of order books in the spot market. This system performs particularly well in volatile market conditions. We have also developed some special indicators, such as tracking meme token dominance, Coinbase APP ranking and other data, and synthesized various indicators into an indicator called "Come Index" to determine the general cycle trend.  

Currently, the platform has more than 3,000 users, of which nearly 600 are paid members. We adopt a subscription charging model and are committed to providing users with more professional market analysis tools.

Mercy: How do you view the current market environment?

Benson< /strong>:The most striking feature of the current market is the lack of new capital inflows. While Bitcoin is nearing all-time highs, other altcoins have seen limited gains. Many exchanges have launched Telegram projects to attract new users, but most of these users came to receive airdrops and left quickly after receiving the tokens, which did not bring much actual increase.

The industry’s difficulties are also reflected in some phenomena: second-tier exchanges continue to lay off employees, and the parent companies of DYDX, Prekin and MetaMask have also recently announced layoff plans. Although Bitcoin has performed well, the impact on other crypto assets has been very limited. If you exclude Bitcoin and look at the trends of other altcoins, it is difficult to say that the current situation is a real bull market. What is particularly obvious today is the lack of entry of external funds, and the market has become a pure zero-sum game. Many VCs hold a large amount of low-priced chips and continue to sell them, causing many projects to be under long-term pressure.

Mercy: If no new growth points are found, how do you think the market will develop?