Most people who look like successful traders online are just the ones who haven’t quit yet. The ones who blew up their accounts stop posting and disappear. So your feed only shows survivors. Game theory breakdown. https://t.co/PRk1DKRbss
I will be recording an AMA video , so post your questions here or in my discord - they don't need to be trading related necessarily - could be questions in general , life , routine , money etc.
I will pick the best ones , wont answer them all because I know for a fact some mouth breather will ask a retarded question. Don't make them too long please.
THE VIDEO WILL BE POSTED IN MY DISCORD - LINK IN BIO.
I will need to see A LOT of support on my profile in order to release this "book" - most extensive project I've ever worked on.
Done with weak axiomatic paid content , I'm shifting your whole perspective with this one. Not for the casuals.
Haven't posted about Game Theory in a while so figured I should revisit the topic and spread some "game" :
Perfect Bayesian Equilibrium
My goal today is to kinda re tweak your thought processing when it comes to scalping or in general just trading the tape/footie. How you should approach it in order to filter out whats noise and what will actually make you money.
Every aggressive buy, sell , iceberg defense , and failed auction is a signal sent by a trader whose true type you do not know. You can't know if they are informed ( you saw it on Oil futs in previous weeks - fire emoji ) , liquidating? chasing fomo? hedging? offside/trapped? The markets only job is to update beliefs from that signal.
Your mindset should be the following ( roughly ):
- observe the action
- update the probability of what type of player produced it ( you just gotta gather data around this because it will save you so much time and money )
- respond only if the updated belief justifies it
Key concept we're discussing here : You can't be treating all aggression as equal.
For example : a market buy that rips through offers and instantly stalls into heavy absorption is often a pooling signal: basically any trader type can produce it ( fomo buyers, short liquidations, execution algos, and genuinely informed buyers can all print the same tape) .
You need to understand this - if different types can CHEAPLY mimic the same action - the signal is weak , so you can't conclude " this is GIGA BULLISH GUYS 🤓☝️ " just because you saw aggression and a delta spike.
Most of your job here should be identifying scenarios that are expensive to fake , because those are the ones that actually matter and will make you money at the end of the day.
Now look at this example which is the contrast to the previous one : You see someone keeps paying spread + impact re attacks after pullbacks, absorbs counterflow, and price still can't auction back through the origin. This is closer to a separating signal because weak hands usually cannot afford to keep expressing conviction like that. Therefore you can't treat a big buy as your sole signal to go long , that is if you're not a degen perma bull ofc .
TLDR your edge is knowing what type of participant could afford to do this , and what does the markets reaction say about that probability NOW.
These you shall monitor if you don't wanna end up a broke loser 🧙♂️:
failed breakdowns
trapped INITIATIVE sellers/buyers
repeated bid/ask replenishment
delta/price/CVD divergences
squeeze continuation after absorption
fake breakouts that cannot attract any follow through
Cheers frens 😼