Interview Subject: Paleking, MVC Partner
Interviewer: FC Talk
Why study professional traders? Because the most effective way to build trading strategies is to learn from those who've consistently navigated market cycles successfully.
The Evolution of a Trader: From EOS Beginner to Cycle-Based Strategist
FC: When did you enter the crypto space?
Paleking:
I started trading in October 2017 with EOS—turned ¥10,000 into ¥100,000. Ironically, I discovered Bitcoin and Ethereum after EOS. That project served as my gateway into crypto.
Initial Capital:
Began with ~$30K (¥200K). The 2018-2019 bear market was brutal—lost money in 2018, gave back gains in 2019. Real profits came in 2020’s liquidity boom by avoiding leverage and exiting positions early.
Key Insight:
"Trade during uptrends; during downtrends—travel, date, do anything but trade."
I cleared positions before May 2021’s crash, skipped the NFT/gamefi frenzy, and re-entered at Bitcoin’s $20K bottom in late 2022. This cycle-based approach defines my journey.
Trading Strategy Breakdown
Part 1: Chain Data for Macro Timing
Core Philosophy:
- Outperform beta (market returns).
- Focus on macro timing via Bitcoin’s supply distribution.
Key Metrics:
NUPL (Net Unrealized Profit/Loss)
- Deep red = Extreme capitulation (buy zone).
- Blue = Extreme greed (sell zone).
HODL Waves
- Declining short-term holders (<1 month) signals bottoms.
- Declining long-term holders (1-3 years) signals tops.
Example:
Used these to buy at $18K (2022 low) and exit April 2021’s peak.
Part 2: The "Zero-to-Hero" Alpha Strategy
2020-2021 Approach:
Identified 100x projects with:
✅ Bear-born startups
✅ Low valuations
✅ Clean token unlocks
✅ Strong backers
✅ Top exchange listings
2023 Adaptation:
Screened top 1,200 coins for post-October 2021 launches—found 30 candidates that delivered alpha.
Current Market:
Structural bull markets demand sector rotation focus (80% in large caps like SOL/BNB, 20% in high-risk alphas).
Part 3: Trend Trading > Fundamentals
New Alpha Rule:
"Buy strength, ignore noise."
- Monitored 9-month price breakouts (e.g., SOL 3x post-breakout, TON 3x).
- Logic: If a coin consolidates for 9+ months, its breakout signals strong accumulation—ride the trend.
Next Phase:
Focus on coins with clear accumulation patterns rather than speculative narratives.
Part 4: Scaling to $50M
Challenges:
- Larger positions demand higher liquidity (top 20 coins only).
- Reduced tactical trading (no quick flips).
Alpha in Size:
Simply identifying which top-20 assets outperform Bitcoin becomes the ultimate alpha.
Trading Wisdom: Less Is More
Key Takeaways:
Study Market Makers
- Analyze why whales buy/sell vs. technicals alone.
Trim the Fat
- Focus on liquidity + supply + sentiment—not fundamentals.
Risk Mantra:
"Small wins, small losses, occasional big wins—never big losses."
Stop-Doing List:
❌ No FOMO trades
❌ No unchecked portfolio drawdowns
Staying Sharp
Advice:
Organizational Discipline
- Split capital among strategies to diversify alpha.
Follow Price Action
- (Even late-stage moves like ORDI can still work.)
Map the Hype Cycle
- Gauge who’s talking about a project (early insiders vs. latecomers) to time entries.
Book Recommendation:
The Story of Shanghai Fashions (lessons on market manipulation apply perfectly to crypto).
FAQ
Q: How to avoid FOMO?
A: Stick to predefined criteria—if a trade doesn’t fit your framework, skip it.
Q: Best way to learn trading?
A: Reverse-engineer whale behavior via on-chain data.
Q: Handling drawdowns?
A: Full-portfolio stops (e.g., -5% total = exit everything).