Thinking about skipping crypto guy stages 1-4 and going straight to stage 5, “yield farming guy”
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Broadly, there are 3 types of systematic trading strategy that can “work”.
In order of increasing turnover:
1. Yield farming
2. Economically-sensible, slow-converging inefficiencies (cash/futures arb)
3. Fast-converging supply/demand imbalances (inter-exchange arb)
https://twitter.com/therobotjames/status/1359349194230693889 …
Broadly, there are 3 types of systematic trading strategy that can "work".
In order of increasing turnover:
1. Risk premia harvesting
2. Economically-sensible, statistically-quantifiable slow-converging inefficiencies
3. Trading fast-converging supply/demand imbalances
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4. YOLO shitcoins using "Shannon's Demon" <<Logs off>>
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1. Long crypto is an yield-generating fx carry trade. 2) Long crypto is a bet on future reserve currencies vs a dying (dead?) USD. 3) Long crypto is a hedge against short term inflationary (or deflationary; whichever CNBC is pushing that week) expectations. Fixed that for you
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Normal brain: stat arb is a systematic strategy Genius brain: yield farming is a systematic strategy Saanglee brain: hodling is a systematic strategy
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In 3, there’s a spectrum of complexity of modelling (and need-for-speed) starting from same instrument on different venues to cross-sectional relative value. The latter paid much more (easily) when most non-systematic traders traded with little concern for market impact.
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