One of our podcast guests made $2 million per day trading crypto.
Everyone needs to study his story. Now more than ever.
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How He Made $2,000,000 in 1 Day
If you’re an active member of the crypto community, then Crypto Kaleo needs no introduction. He’s truly taken the bull market by the horns, posting daily 7 figure trading profits. But this wasn’t always the case. From losing everything in 2017 to making over $2 million in one day, Crypto Kaleo shares his journey including how he identifies his entries and exits, manages his psychology, and trades the current markets.
Where did Kaleo Start?
Kaleo has been trading crypto daily since 2017 and leverage trading in 2018. When he first started, he slid the lever all the way to 100x, doubled his Bitcoin in a few hours, and next thing he knew, lost it all. He explains how in 2019 he made and lost close to 100 BTC, describing how whilst he was profitable early on, it came at the cost of consistency driven by greed. At one point Kaleo had a BTC long open that, had he followed his initial plan, would have accumulated close to 1000 BTC. His greed, however, pushed him to overtrade and this 1000 BTC slowly went down to 0 BTC. Upon recognizing that this system was unscalable, he focused on setting up a consistent process rather than maximizing the profit on every single trade. Doing so enabled him to find consistency and build the technical and psychological foundation on which 7 figure days are born.
What is Different This Time?
Despite the fact that you might scroll through Crypto Twitter or YouTube and see everybody posting massive gains, Kaleo wanted to be very transparent and explain that the journey was grueling and it was not always this profitable. Now, Kaleo is a lot more conservative with his leverage and understands when to cut the trade and when to add to a position, but it’s not an easy game. In 2017, Kaleo was brand new. He would copytrade influencers and go all in on low cap altcoins. The result? His BTC value eroded. During a bull market (like that which we have experienced the past few months), it is HODLers who tend to do well.
How to Stop Losing and Start Winning & Trading with Intuition
Kaleo has always had an appetite for risk. He credits his steady paycheck as his safety net for being able to throw every dollar he had into the market to try to make back the BTC value he had lost. He would often have a few months of a winning streak only to lose it again later. This cycle would repeat, until at one point Kaleo decided to take a severance package from his job that paid him 1.5 years worth of salary ahead of time just as 2019’s crypto uptrend began. Leveraging this money during what he described as “easy mode” allowed him to achieve incredible multiples. Unfortunately, he again went full tilt due to greed. He admits that the psychological side of trading was the difficult part.
Kaleo emphasizes that trading is a personal journey and there is no one textbook technical analysis holy grail. He specifically focuses on HTF setups that he believes has potential for large impulse moves (e.g. breakout from a multiyear accumulation base). He agrees that this is a highly intuitive approach to formulate a trading system and that it is “innate,” crediting the fact that he is young, unmarried, and entirely committed to the process to be able to take such risks. He likens it to the first time he went skiing: rather than taking lessons, his experienced friends told him that nothing would teach him more than riding the slopes. He admits that whilst the first day of skiing was brutal, by the second day he was “leaps and bounds” ahead of others who had taken the conventional approach. In fact, he was on the black diamond by day 3.
How Kaleo Manages his Psychology & Risk
Kaleo admits that it is mentally and emotionally draining to see gain after gain wiped away. That being said, he knew that he had what it took to execute high probability trades from a technical side if he could learn to manage his emotions and psychology. The biggest lesson he learned was that he didn’t have to be in a trade 24/7 and that it is okay (and encouraged) to walk away from the screen when things aren’t going well.
Kaleo explains how the best way to approach trading and build wealth is the “long, slow, and steady” approach whereby you take good trades, accumulate slowly, and compound gains. He admits, however, that another way is through concentrated risk wherein you find trade setups with the potential for large multiples, and ease off the risk every time you win. In other words, you find a 100x setup, then a 20x, then a 5x, etc, until you’re left playing just with spot. This type of trading, however, always comes with a cost and for Kaleo that cost was “years of struggles.” Now, Kaleo employs a much more convservative risk management approach and prefers the long, slow, and steady approach.
Kaleo’s Goal & Advice to Himself
Kaleo’s goal with trading is not the money, but rather to push himself to be able to trade at an elite level, similar to institutions, without the same background or training. Money and success are fleeting and they don’t define him, but the ability to leverage his psychological iron fortress that is a result of years of hard work to trade with the best is what drives him.
If Kaleo could go back in time to when he was starting, the advice he’d give to himself is “never trade.” Although he loves the game and is appreciative for what it has become, there was a period of time where “it just wasn’t worth it.” Mathematically, he reflects on all of the spot BTC he once had and calculates that had he not overtraded, the cumulative value of this BTC would not have been too different from what he has earned by trading. The process of going through the ups and downs was draining and a cost to consider for new traders.
Managing Large Losses & Non-Crypto Investments
Whilst Kaleo posts large winner days, there are also days where he has lost north of $1 million dollars. He explains that if you’re looking to trade large position sizes, you cannot be emotionally attached to the money and by now he has become numb to the losses. This is a key difference from his early days when he would let the loss of money affect him and would revenge trade to try to make it all back. Now, being able to take a step back and restarting all whilst forgetting about “what you once had before the loss” is a critical skill to develop.
When asked if Kaleo is diversifying outside of crypto, his response was “100% yes.” He is very active with the stock market and options. As of recently, Kaleo focuses on diversifying across different sectors and buying leaps, options contracts that expire in more than a year, rather than trying to win the lottery on weekly expirations. He’s willing to be patient here.
Final Thoughts & Further Resources
One of our biggest takeaways is that trading is a highly personal journey and everyone has their own style. For people who are struggling, Kaleo says that if you’re willing to put in the work and believe in yourself, there’s “nothing whatsoever out there that is beyond your ability to work your way out of it.” Kaleo has shared an absolutely incredible story, showing that anything is possible with hard work and dedication.
Many concepts and terms were referenced in this conversation with Kaleo. Here are further resources for those who want to learn more about: Finding Your Trading Style, Technical Analysis, Risk Management and Trading Psychology.
To hear more from Kaleo, check out our podcast #62 How He Made $2 Million Per Day Trading Crypto with Crypto Kaleo.
Finally, to learn more about Non-Crypto Investments, subscribe to receive tomorrow’s letter on Portfolio Management 👇
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On-Chain Analytics: Introducing Dormancy
The charts have been a battleground. Last week, price opened the week at a local low of $31,327, hit a local high of $40,757, before trading back towards the lows. This week, a period of consolidation has resumed with resistance at the $40k level. The market is coming to terms with the dramatic sell-off last week and we remain range bound between key levels.
The millionaire dollar question: is this a bear market trend or has the market returned to a re-accumulation range? No one knows the answer to this. However, on-chain analytics can sometimes help us view buying and selling pressure in a different way compared to the charts. Glassnode insights share a fantastic weekly free article.
Dormancy is the orange line in the above graph and we can see that it is in a downtrend and ‘returned to pre-bull conditions’. According to Glassnode Academy, dormancy represents the average number of days that each spent coin had remained dormant before it was moved:
High dormancy values mean that, on average, coins spent that day had been held for longer periods of time in an illiquid state and may be being spent back into liquidation circulation.
Low dormancy values mean the coins being spent that day are relatively young, signalling that older coins are generally remaining unspent, and on-chain volume is characteristic of more day-to-day traffic.
Looping back to the above graph, we can see older coins appear to remain dormant (low values) despite prices falling 50% from ATH. This helps make the case that old coins are holding onto their stack, and the majority of spending is by holders of relatively young coins.
Improving Your Sleep: Part 2
Here are the next 6 steps we suggest for improving your sleep. Please note we are not medical professionals. Readers should always consult a doctor or other medical professional before following any of the steps mentioned in this 2 part series.
7. Keep your environment cool. Overheating will significantly reduce sleep quality.
8. Avoid meals before bed. Avoid large meals 2 hours before bed.
9. Avoid workouts before bed. No heavy exercise up to 3 hours before bed.
10. Diet, exercise and meditation. These would each require their own article to cover completely. They are of the utmost importance to our health and sleep. Here are a few tips:
Diet: eat primarily real whole foods
Exercise: minimum of a 20 minute workout a day + 5,000 steps of walking
Meditation: 10 minutes a day
11. Herbal assistance. Not the type of herb you are thinking of… these teas can drastically improve sleep quality and come with a range of health benefits: Valerian Root, Lemon Balm, Lavender and Chamomile.
To avoid psychological dependence you may only wish to drink these 3-4 nights a week. Avoid pre-packaged tea and supplements if possible. Brewing the real dried flowers/roots tends to be most effective.
We also have a video guide on the Market Meditations YouTube: Sleep Optimization for Optimal Performance with Matteo Franceschetti
If you enjoyed this section of the newsletter and would like to learn more about fitness, sleep, meditation and nutrition, let us know in the comments.
Back To The Doge Days?
On Tuesday, Coinbase announced it is adding the meme-inspired cryptocurrency dogecoin to its professional trading platform. Coinbase pro said in a blog post that users could transfer DOGE into their professional trading accounts, with trading expected to launch on Thursday “if liquidity conditions are met”.
While the blog did not announce whether Coinbase would add the cryptocurrency to its retail trading platform and mobile app, the publicly traded crypto exchange typically adds cryptocurrencies to its retail platform a few weeks after first listing on the professional version.
Dogecoin’s price spike appears to have spiked on the announcement, trading at about 40 cents at time of writing. The new listing exposes DOGE to a new breed of investors. Coinbase debuted on Nasdaq on April 14 and is considered synonymous with high net worth investors.
That being said, it’s worth noting that whilst DOGE has relatively fewer use cases compared to some of the DeFi tokens in the space. If and when a bear market does take over, it seems more probable that DeFi tokens will fare relatively better compared to tokens with few to no use cases. Also, coins that spike up very quickly are prone to spiking down just as quickly. No resistance on the way up means no resistance on the way down. This is one of the key reasons why corrections are healthy in a bull market. It creates more support during a dip.
Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here.
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