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The Wolf Den #581 - The One Thing We Can Control

September 16 · Issue #581 · View online
The Wolf Den Crypto Newsletter
Welcome to The Wolf Den! This is where I share my ideas about the market, technical analysis, education and advice regarding trader psychology and emotional control. The newsletter is released every weekday and is completely FREE.
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In This Issue:
  1. The One Thing We Can Control
  2. Altcoin Charts
  3. Legacy Markets
  4. Does POS Make Ethereum A Security?
  5. ETFs Proposed To Track Politicians’ Trades
  6. FTX Is Reportedly In The Lead To Buy Voyager’s Assets
  7. The Merge Cuts Global Energy Consumption by .2%
  8. The New Era For Ethereum | Experts Discuss What Will Change Post Merge!
  9. My Recommended Platforms And Tools
The One Thing We Can Control
The one thing that you can always control in trading is how much money you lose.
This is the most important, indisputable fact that you must accept if you are going to be a successful trader.
You CANNOT control how much money you are going to make. A trade may never be in the green, so you may never have the opportunity to take a profit. What you can be sure of is where you set your stop loss and how much of a loss you intend to take when you do so.
The only small argument against this is slippage or a failed stop loss - but those should be minor issues when planning a trade, and are not a significant concern on any liquid asset or exchange.
People give numerous reasons for refusing to take losses. Cutting your loss is damaging for your ego - often more so than for your wallet. People are narcissistic and trading is an activity where we face the consequences of our most immediate decisions in real-time. Trading is a constant reminder of who we are, and the truth is inescapable.
Everybody knows Freud’s approach to psychoanalysis, identifying three parts of the personality : the Id (unconscious), the Ego / Me (what we are at a given moment in time and the Superego (the limits that society imposes on us,). You can also add to this the ideal Me, which is what we desire to be. This is the idea of comparing yourself to the perfect outcome that I have discussed in the past. You will always lose money if you gauge your performance on the best possible scenario.
Trading reflects back at us what we really are, and the results are often brutal. Many traders will lose everything by not yielding because they fear being “wrong,” and being wrong is damaging to their self-image, shattering their ideal Self and their Ego. That’s why they move their stop losses in the middle of a trade.
This is why we all know people who have been ruined in financial markets but still insist that they were right, that their analysis was solid, that the market was either totally manipulated or that only idiots trade. We hear this in Bitcoin all the time. It is simply a defense mechanism to avoid accepting responsibility for their losses. They need to find a scapegoat: the broker, the indicator, the market itself, Twitter influencer or the whale that dumped.
Few people I know can simply say “I was wrong.” Especially in markets. Usually, a trader believes they were right, but an external force caused the loss. A person who can live off his trading is statistically exceptional - they are among only 5% of traders. They accept that they are imperfect, and will be wrong thousands of times. More importantly, they know that being wrong does not matter. What matters is following their plan and losing small.
You must be totally uninhibited with no fear of failing. This makes trade management easier. You will stop moving your stop losses for fear of being wrong. You cannot combine your self-worth, social status, profession, and trading results with who you are. Most traders take a big loss and fall to pieces. Their psychological structure completely collapses. You are not your job, and your earnings are not your identity. I am not a better person because I made $100,000 this month, nor am I pathetic and stupid because I lost that amount.
You have to stop identifying with it. It is not who you are.
You will know that you have made it the day that a loss is no more than information like any other, which has no bearing on how you think about yourself. The same goes for a gain. A trader must strive toward psychological strength. Trading can be the path to becoming a more balanced, more accomplished person, and more than the path to just becoming “rich.” It can make you a better person, more capable of accepting and admitting when you are “wrong.”
It’s all in your head.
Plan your losses, accept them and move on. It’s the only thing you can control in trading.
Altcoin Charts
I do NOT share signals in this section. I share setups and charts that I am watching, in an effort to help show you how I view a chart and what criteria would be necessary for me to consider taking a trade. NEVER blindly buy something because it is listed in a newsletter or posted on twitter. You need to have a plan when you enter a trade. These are just ideas, and are almost always “if, then” scenarios. If a certain set of things happen, then I would consider a trade.
This is the Bitmex chart for perpetual futures on ETHW/ETHPOW, the new proof of work fork of Ethereum.
No surprises here. Price has dropped massively since the merge, opening trading at $96 on Bitmex and dropping to a low around $8 just a few hours ago. It is currently trading at $13.
Perhaps there will be volatility and trading activity - BCH was an exceptional asset to trade after the fork from Bitcoin. That said, there’s endless downward pressure of people selling these free coins, so be very careful.
Legacy Markets
Stocks Slide Deepens as Dollar Extends Advance: Markets Wrap - Bloomberg
“Equities extended declines on Friday, with an index of global stocks on track for the worst week since June, while a gauge of the dollar soared to a fresh record, reflecting bets for outsize Federal Reserve interest rate hikes.”
Some of the main moves in markets:
  • The Stoxx Europe 600 fell 1.2% as of 10:10 a.m. London time
  • Futures on the S&P 500 fell 0.9%
  • Futures on the Nasdaq 100 fell 1.1%
  • Futures on the Dow Jones Industrial Average fell 0.8%
  • The MSCI Asia Pacific Index fell 1.2%
  • The MSCI Emerging Markets Index fell 1.4%
  • The Bloomberg Dollar Spot Index rose 0.3%
  • The euro fell 0.3% to $0.9972
  • The Japanese yen rose 0.1% to 143.36 per dollar
  • The offshore yuan fell 0.3% to 7.0338 per dollar
  • The British pound fell 0.8% to $1.1375
  • The yield on 10-year Treasuries advanced one basis point to 3.46%
  • The yield on two-year Treasuries advanced three basis points to 3.90%
  • Germany’s 10-year yield was little changed at 1.78%
  • Britain’s 10-year yield was little changed at 3.16%
  • Brent crude was little changed
  • Spot gold fell 0.2% to $1,662.13 an ounce
Does POS Make Ethereum A Security?
Ethereum Merge Attracts SEC Chair's Attention, ETH Drops 8%
Mr. Burns. Errr, Gary Gensler, has hinted at the idea that Ethereum is now a security, because lending, staking and earnings rewards make it so.
“Multiple crypto exchanges, including Coinbase, Binance and Kraken, offer ether staking services, allowing users to participate in the Ethereum ecosystem directly from their accounts.
Those three platforms recently controlled more than 30% of all staked ether, according data analytics unit Nansen, while liquid staking provider Lido Finance managed 47% all by itself.
Gensler reportedly believes that process seems consistent with lending, which would render Ethereum staking services akin to securities offerings under SEC law.”
I disagree, and utilizing an 80 year old test to determine whether a decentralized protocol is a security is iffy at best.
Ethereum has utility - plenty of people simply purchase it to pay gas fees, without ever staking it or expecting a return. There is no CEO or centralized body.
It is not a security.
ETFs Proposed To Track Politicians' Trades

The Unusual Whales Subversive ETFs for both Democratic, $NANC, and Republican, $KRUZ, Congressional trading have been filed.

The ETFs follow trading of Democratic and Republican members, and their spouses.

Get ready to follow along unusually.
I laughed out loud when Unusual Whales DMd me this tweet.
While I have serious doubts that something like this would ever be approved (we can’t even get a Spot BTC ETF, after all), it logically makes sense that retail investors should be able to track the trades of their elected representatives.
Unusual Whales has put a glaring spotlight on the suspect trading activities of Nancy Pelosi and friends, seemingly single handedly forcing legislators to consider a ban on trading by elected officials.
We should all be granted the same access by tracking their trades.
FTX Is Reportedly In The Lead To Buy Voyager's Assets
FTX Is in the Lead to Buy Crypto Lender Voyager Digital’s Assets Out of Bankruptcy: Source
I have been unable to confirm whether this is fact or hearsay, but chose to include it. The auction is private and behind closed doors, so this information would have to be leaked.
“Exchange giant FTX is in the lead to buy the assets of Voyager Digital, the cryptocurrency lender whose bankruptcy filing deepened this year’s industry crisis, but higher offers could still come in in the days ahead, according to a person familiar with the matter.
An auction was held this week through bankruptcy court for Voyager’s assets. At the final stage it was a battle between billionaire Sam Bankman-Fried’s FTX exchange and Wave Financial, a digital-asset investment firm, according to the person.”
Voyager Official Committee of Unsecured Creditors
The auction has adjourned for the day and is scheduled to resume tomorrow. The auction will continue until the highest and best bid is selected.
According to the Voyager Official Committee of Unsecured Creditors, the auction is ongoing and will continue today and until the highest and best bid is selected.
I have minimal clarity on what the “best” bid would be, and whether Voyager will continue operations or liquidate.
I will keep you updated, but cannot comment much on unsubstantiated reports.
The Merge Cuts Global Energy Consumption by .2%
Vitalik Buterin Says Ethereum Merge Cut Global Energy Usage by 0.2%, One of Biggest Decarbonization Events Ever
“The Ethereum Merge lowered the world’s energy consumption by 0.2%, according to the blockchain’s co-founder Vitalik Buterin, marking what may be one of the single biggest decarbonization efforts in history.
The overhaul cut Ethereum’s energy use by 99.988% and carbon-dioxide emissions by 99.992%. The decrease means the network now spews out less carbon dioxide (CO2) than a few hundred U.S. households do during a full year of electricity use, according to a new report from the Crypto Carbon Ratings Institute (CCRI).
"We’re delighted to have commissioned this report from CCRI, which substaniates the Ethereum Merge’s impact as likely the biggest decarbonization effort of any industry in history,” ConsenSys founder Jospeh Lubin, who also co-founded Ethereum, said in a statement.“
The New Era For Ethereum | Experts Discuss What Will Change Post Merge!
Podcast - The Wolf of All Streets
Ethereum merge has happened and ETH switched to proof-of-stake. What does it mean and what are the implications of this? Let’s discuss with my guests: Anthony Di Iorio, co-founder of Ethereum, Nimrod Lehavi, co-founder of Simplex, Peter Saddington, VC investor, Pierce Crosby, general manager at TradingView, Jason Lau, COO at OKCoin, Gabor Gurbacs, Strategy Advisor at VanEck, and Matthew Sigel, head of research at VanEck.
In this episode, we discuss:
  • When Ethereum decided to switch to PoS
  • How did OKCoin prepare for the merge
  • ETH staking is skyrocketing
  • Institutions and the merge
  • Why PoS at all?
  • Why are Bitcoiners so angry about the merge
  • What’s going to happen to the miners?
  • Ethereum PoW fork
  • Environmental issues
  • Regulation and decentralization
  • TradingView: Ethereum merge did not result in the interest from traders
  • DAOs
  • What Ethereum co-founder is building now
  • What will happen in the next couple of months
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The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this e-mail constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to “Buy,” “Sell,” or “Hold” an investment.
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