Guest message: Human nature is often the biggest obstacle encountered in trading. As a data-driven trader, I have been committed to promoting a more rational trading decision-making model. OKXs rich product line and in-depth technical support have been a great help to CoinKarma. I hope to continue to create value in the future.
Benson currently runs the trader data platform Coinkrama, which mainly analyzes the market reversal timing from the perspective of liquidity. At the same time, he is also a secondary market trader and worked in data analysis at a large financial holding company in Taiwan. He was noticed by an exchange for publishing articles on the Internet and entered the blockchain industry.
OKX specially invited him as a guest speaker in the Friends of OKX series, hoping that his past experience and observations and thoughts on the industry can inspire everyone.
The Friends of OKX series is a special column specially planned by OKX, hosted by Mercy (@Mercy_okx), the official community ambassador of OKX. It aims to explore the career stories, industry insights and lessons learned of KOLs from different backgrounds for novice users to learn and refer to.
1. Recalling my first time in the cryptocurrency world
Mercy: What was the opportunity that led you to enter the cryptocurrency industry? Did you start trading right after you entered the industry?
Benson: I officially entered this industry in March 2018. Before that, I worked as a data analyst at a large financial holding company. Because I published an article on the Internet, the HR of an exchange saw it and became interested. At that time, I was also looking for new opportunities, so I joined this exchange.
At that time, the exchange’s vision was to become the “Goldman Sachs of the cryptocurrency world”, operating both an exchange and an ICO, hoping to help underwrite high-quality projects like Goldman Sachs did with 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 really doing trading. I bought spot goods at that time. Many people suggested that I buy Bitcoin and Ethereum, thinking that this was the low point. At the same time, I also invested in some ICO projects. There was 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, but in the end it all went to zero. I continued to increase my position when Bitcoin continued to fall from $9,000 to $6,000. Finally, I completely lost confidence when it was more than $4,000 and sold all my shares, with a total loss of more than $10,000.
Mercy: After you left your job at the exchange, you chose to write articles. Has your understanding of the industry changed after this transition?
Benson: After leaving my job, I was really disappointed for a while, and even considered going to more mainstream web2 companies like Amazon and Google. While looking for a job, I started writing articles on the Momentum website, mainly criticizing blockchain technology. I remember writing an article called Six Major Problems in the Implementation of Blockchain. Interestingly, these problems seem to have not been solved yet.
The real turning point in my career was when I found a way to make stable profits - BitFinex lending business. At that time, I wrote an article about how to lend USDT to others on the exchange to open leverage. After the article was published, it attracted widespread attention in the entire Chinese-speaking area, and many people joined the market. A group member felt that the lending robots on the market were not good enough, so he developed one himself. This is actually the origin of FundingBot.
2. Establishment of personal trading system
Mercy: Why did you choose to focus on the derivatives trading market? How did you establish your methodology?
Benson: To be honest, I had no trading methodology at the beginning. You may think that I was very good at trading at the beginning, but in fact, I was more familiar with product structure, such as the design logic of perpetual contracts and the formation mechanism of market depth.
Later, I found that due to the lack of fundamental analysis in Crypto, technical analysis is widely used. However, this market has a strong reflexivity - because too many people use the same technical analysis method, it makes it ineffective. For example, when many people are paying attention to the head and shoulders top pattern, the market often breaks this expectation.
As for why I chose the derivatives track? It was because when I was paying attention to FTX in July 2019, I found that although the spot market had formed a three-legged pattern, there were still great opportunities in the derivatives track. At that time, the daily trading volume of Bitcoin perpetual contracts of the leading derivatives company BitMEX reached 10 billion US dollars, which made me realize that in this field, product innovation is the key to success.
Mercy: You mentioned your experience of making hundreds of thousands of dollars to millions of dollars. What was the process like?
Benson: In 2021, I started with $300,000 on a certain platform and eventually made more than $6 million. It was a bull market at the time, so this rate of return was not particularly exaggerated. Looking back, I mainly judged market sentiment by observing the BitMEX funding rate. When the funding rate dropped below 0.01%, the market was relatively sluggish. From the perspective of the bull market, the stop loss point for long positions could be set closer.
In terms of spot trading, platform coins are my biggest source of income. At that time, Coinbase was about to go public, with a market value of nearly $100 billion, while the platform coins in the currency circle were valued at only a few billion. This valuation mismatch brought huge opportunities, and major platform coins saw significant increases.
However, as the Federal Reserve began to raise interest rates, the entire market environment changed fundamentally. It was not until the first half of 2022 that I realized that the original trading method had failed, so I chose to suspend trading. This also made me understand that I must always think about when my trading system is effective and when it will fail.
Mercy: What is the daily life of a derivatives trader like? What kind of person is more suitable to be a derivatives trader.
Benson: I think every traders habits are different and there is no fixed pattern that covers the behavior of all traders, but I can share my daily habits.
Every morning, I will first check the price of Bitcoin to see if the market is going up or down, and then pay attention to the top 10 altcoins. Then, I will analyze the market liquidity and decide whether to trade based on this information. My trading decisions are mainly based on two factors: one is that the price reaches a certain position, and the other is that a certain signal appears in the market.
I am not a frequent trader, I prefer left-side trading, that is, waiting for the right time. At the same time, because my trading system is relatively strict, I usually only have 1-2 trading opportunities per week, and sometimes I don’t open a position for 2-3 weeks because I don’t see the right opportunity.
3. Entrepreneurship and the current market environment
Mercy: What prompted you to decide to create the current trading platform? Can you tell us what your platform is doing now?
Benson: The initial idea was very simple, because I am a data-dependent trader and often need to look at data from many different sources. Some are on-chain, some are from spot exchanges, and some are from the derivatives market. I originally just wanted to integrate these APIs into a dashboard for my own use.
When I later discussed this idea with my friends, they suggested that I could productize 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 the spot market order book, and this system performs particularly well in volatile markets. We have also developed some special indicators, such as tracking meme token dominance, Coinbase APP rankings and other data, and combined various indicators into an indicator called Come Index to determine the trend of the big cycle.
Currently, the platform has more than 3,000 users, of which nearly 600 are paying members. We adopt a subscription-based charging model and are committed to providing users with more professional market analysis tools.
Mercy: What do you think of the current market environment?
Benson: The most notable feature of the current market is the lack of new capital inflows. Although Bitcoin is close to its all-time high, other altcoins have limited gains. Many exchanges have listed Telegram projects to attract new users, but most of these users come to receive airdrops and leave quickly after receiving tokens, without bringing much actual growth.
The industrys plight is also reflected in some phenomena: second-tier exchanges continue to lay off employees, and the parent companies of DYDX, Prekin and MetaMask have recently announced layoffs. Although Bitcoin has performed well, the driving effect on other crypto assets is very limited. If we exclude Bitcoin and look at the trend of other altcoins, it is difficult to say that the current market is a real bull market. What is particularly obvious now is the lack of external funds entering the market, and the market has become a pure zero-sum game. Many VCs hold a large number of low-priced chips and continue to sell them, causing many projects to be under long-term pressure.
Mercy: If no new growth point is found, how do you think the market will develop in the future?
Benson: If we can’t create a new narrative or find a growth point that can be recognized by external capital in the next one to two quarters, then I will be very pessimistic about the future market. Bitcoin may go out of the market independent of altcoins. If it can establish its position as digital gold, there may be a slow bull market. But for altcoins, including Solana, I am more pessimistic. Even Solana will face similar problems to ETH after the Meme coin craze.
Many people think that my views are contradictory - I am optimistic about Q4, but sometimes I am pessimistic. The key is that a real bull market requires external funds to recognize the narrative of Bitcoin and cryptocurrencies, and new funds to continue to flow in. The current market mainly relies on Trumps hedging transactions and expected support for ETFs. Such a bull market may not last long.
Mercy: Considering the overall market environment, do you have any suggestions for novice players?
Benson: My advice is to stay awake at all times. Don’t blindly follow others just because you see them making money. The rules of the game may change at any time.
Regarding trading strategies, I now prefer defensive thinking. Although the market may continue to rise, I will anticipate in advance when I need to withdraw, rather than blindly pursuing higher returns. Especially when the market is overly optimistic and even laughs at those who point out risks, we must remain vigilant.
In this fast-changing market, only those who can detect changes in the market environment in time and constantly adjust their strategies can succeed in the long run. Remember, there is no always correct strategy. The key is to be ready to respond to market changes at any time. As for me personally, I will continue to focus on developing and improving the data platform to provide users with better market analysis tools. I believe that in this market, timely and accurate data analysis and rational judgment are always the key to success.
4. First impression of OKX
Mercy: When I met you offline in Dubai before, I found that your cooperation with OKX is actually quite in-depth. Can you talk about your impression of OKX?
Benson: After FTX closed down, I started to re-examine various exchanges. I found that many of OKXs products were very in-depth, especially in the derivatives track. What impressed me was your options product, which invested a lot of resources and was very professional. Because the outside worlds impression of OKX is mainly an exchange for 2C users, but I was surprised that it invested so deeply in professional products such as options, which are mostly 2B.
In addition, I think OKX is a company that pays great attention to products. For example, your Signal Trading and various API interfaces may not be very useful to retail investors, but they are extremely important to professional users. I am impressed by your deep attention to these details.
I especially noticed that OKXs professional tools are very complete. Many exchanges products may only be superficially processed, but OKX will take every function to the extreme. Take the options product as an example. Not only are the basic functions complete, but even some functions that professional traders will use are taken into consideration. This kind of focus and polish on the product is relatively rare in the entire industry.
Another thing that impressed me was that you have a lot of under-the-hood features, that is, professional tools that are not displayed on the homepage but are actually very useful. These features may not be known to ordinary users, but they are indispensable for professional traders. This also reflects OKXs investment in product depth.
Mercy: Let’s talk about the opportunity to cooperate with OKX?
Benson: Actually, when I was developing the data platform, I found that only OKXs API architecture best met our needs and could be used directly. At that time, we needed to connect to various data when building a quantitative trading platform, and OKXs interface design and document support were very professional. This is also one of the important reasons why we chose to cooperate deeply with OKX.
Through the process of cooperation, I feel more and more that OKX is a truly product-oriented company. The OKX team usually seriously considers and responds quickly to the professional user needs we put forward. This focus on products and attention to user needs makes me feel that OKX is an exchange worthy of long-term cooperation.
Risk Warning and Disclaimer
This article is for reference only. This article only represents the authors views and does not represent the position of OKX. This article is not intended to provide (i) investment advice or investment recommendations; (ii) an offer or solicitation to buy, sell or hold digital assets; (iii) financial, accounting, legal or tax advice. We do not guarantee the accuracy, completeness or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals for your specific situation. Please be responsible for understanding and complying with local applicable laws and regulations.
