REKT Vision: How To Survive the Crypto Chop ft. Ovie "OSF" Faruq, Andrew Parish aka AP_Apacus & Tillman Holloway from Arch Public

31:12And so that's what this strategy specifically does. And that's how you can essentially play with the percentage up and percentage down qualities and the time periods to craft something that's specific to you. If you want something that's executing a lot of trades, you're going to have the thresholds very, very small. If it moves 1 % in a one hour period, it's going to trade. And you get to define what that volatility looks like so that you can not only create something that works for you, but the beauty of our software is it's integrated with TradingView and you can backtest all of those parameters right there instantly and see how they would have performed over specific time periods.

31:54So in this one here that I have set up, it's set up to purchase$580. So my starting capital is$10 ,000. So$10 ,000 is what I've put in and it will only ever take$10 ,000. And this is connected to my Gemini account, but I think you guys are working in other exchanges as well, which we should have up here soon. So if Bitcoin falls by 2.5%, it will automatically buy$580 worth of Bitcoin. And that's done through the API connection I have with Gemini through TradingView into ArchPublic, which honestly, it took me less than 10 minutes to set up, probably about five minutes to set up. It's pretty easy to do.

32:35And then if Bitcoin rises by 2.1%, it will sell$260 worth of that position. So you can see it's buying a larger amount on a larger backup, selling a smaller amount on a smaller increase, which is how you accumulate that bitcoin over time um and it basically just does this automatically so i don't really have to do anything and i think the cool thing about this is you can as you said we can backtest it for different time periods and stuff and see how the strategy would have performed so i don't know i guess let me go to this one here um and go to where do i change this again to see the back testing um right there quickly you know you can show folks that there was a you know you you've got a uh uh yeah you got along there right on right on your chart yeah so you know that's 70 not 78 and change right 78.3 k i automatically went long right now right so So there is what I just consider to be the beauty of the algorithm itself.

33:49The beauty of algorithmic automated trading is that, you know, across crypto Twitter, when we were at 78, 79, 80 percent of people that think that they know what they're talking about are like, well, we're probably going to 62. Right. Or we may we may touch the 50s. We may still do that, but in the moment, 99 % of retail traders are like, how in the world am I going to have the balls to hit buy on a 78K Bitcoin print when everybody that I follow says don't do that? The algorithm doesn't care about anybody on crypto Twitter. It's not listening to anybody. It's just using math to grow your position in Bitcoin over time.

34:38And then when you get a pop that's more than 2.1 % on a six-hour candle, you're going to sell a little bit of it and generate cash yield. Again, an extraordinary tool that removes the emotions of fear and greed and simply executes a plan that you're comfortable with over a longer and extended period of time. And you can adjust that. For example, if you notice, you know, this is a two-week chart. If you notice that giant downturn after the big candle right at the beginning of March, you know, those one, two, three, four, five, six subsequent red candles right there on the right-hand side, we didn't enter any positions.

35:17The algorithm didn't enter any positions because it didn't meet the qualifications to do that. But you could absolutely change the variables to essentially purchase on every one of those downturns. And the beautiful thing about the software is, like Andrew said, it's not guessing where the bottom is. It's actually using average price volatility in the last two weeks to determine where that velocity is going and where the bottom is. And so when you see a candle become exhausted and you see the parameters be met, it's going to enter a position on that exhaustion and it's going to enter a position based upon the parameters that you have individually met.

36:01And so you can make this more aggressive, less aggressive. This is a very conservative. This is more of like a, you know, a very bias towards the buy side. If you notice the two times that it's entered in the last couple of weeks have been at the very bottom of major downturns. That's a conservative way to use the software. Let's switch to the intelligent buying algo and let me run through that. So turn the eye off. So hide this one and then turn the other one on. This one here. And then, yeah, and then double click it and it should pull up your settings. yeah um and then if you go down to the very bottom of this first page settings uh let's see here no this isn't the until you go to the third one this isn't yeah this one here yeah but you're gonna have to hide uh and then open it up yeah so do you see um let's see here go down to the very bottom if you don't mind of that page uh should be at the bottom right here Okay.

37:12I'm on too small of a screen to see if you're on the right strategy. Let's go to the charts that we have, the static charts, and I can see those better. They're much larger. If you notice, all of the cells are on the top of big green candles and all the buys are at the bottom, or excuse me, the buys are at the bottom of the red candles, the cells are at the top of the green candles. Again, you can define what those thresholds look like, but you're always going to be buying. So one of the things that most traders do that is bad for their entries, both their fill prices on both the buys and the sells is you should theoretically be buying all of your positions, right?

37:56At the bottom of exhaustion, but most people start buying at the breakout. They're actually buying on green candles and selling on red candles. Those are going to get you horrible fill prices. And that's what automation gives you an advantage in, in the fact that it's calculating things so quickly on your behalf and then acting on those calculations that you're not caught. So for example, if you look at the middle of the screen on that giant green candle where we exited, okay? That exit happens at the top of the body, not the top of the wick, but the top of the body or the close of that giant green candle.

38:41Look at the volatility of the next green candle, total indecision. You have no idea what to do. It actually would, as a traditional trader, you would think that's a continuation pattern because the wick on the bottom is much longer than the wick on the top, which is a bullish signal. But look at what happened. It was an absolute waterfall event. And instead of getting emotional about that waterfall event and selling on the second or the first red candle and losing 20 or 30 percent of the potential profit we would have, we exited on the green candle. We circumvented having to sell in the waterfall event by getting out at the top of a candle that has tons of sell liquidity.

39:30That's a big buy candle, and that's when you should be selling on buy candles, and you should be buying on sell candles. So if you look at the waterfall event, we got in on that third red candle. We bought a little bit, and then we bought a little bit more on the fourth candle, and then waited, and the bounce happened, and look at the exits of those two positions on green candles at the tops of the body, both in profit. So just being able to have the edge of the trigger event happening quicker than you can put your finger on the mouse and type in the trade limit price and hit execute, just that alone, we think is such a powerful notion that retail needs to see that we've given away this software for free.

40:20If you go to our website, You can download the software. You can use it up to$10 ,000 of trading capital every year. And you can do that for as long as you want at absolutely zero cost. And we think it's such a compelling tool that gets you to see behind kind of the technological curtain of what high frequency trading is why it makes up 70 plus percent of the volume of every market on the earth now. because it executes quicker with less indecision and with no emotion. And it's able to monitor the conditions of the market 24-7, having that discipline and that level of focus. No human being can do that.

41:03And when you're dealing with crypto markets in particular, it becomes infinitely harder because the nature of the market is 24-7, 365. And that's no way to live. So taking advantage of the volatility in a market that only presents the volatility when you're asleep in most cases, without the automated tools, you cannot harvest that volatility. You can't take advantage of it. So what happens here? I guess this strategy works best. The market is volatile because you're going to get these great peaks and troughs to buy and sell at every time. and the price action we've seen in the last two or three weeks has been incredible for it and you know clearly this as we've seen in the charts the saga has done well how does this perform when you have a continuously rallying market how does it prefer perform when you have a continuously market that continuously sells off a bear market um and how would you would you make any adjustments to these strategies.

42:09And by the way, like, you know, the 2.5%, 2.1 % is something that I showed you guys, which is a recipe that you guys, stock recipe that you guys have. But all those percentages are alterable. So you can change them to whatever you want and you can even make it as big as like 50 % and, you know, minus 50 % plus 10 % on bigger size if you wanted to think about trading over like a cycle, if you like, and all that kind of stuff. But how did it perform in different types of momentum markets? and how would you change the recipe or strategy, if you like, to adjust to those? So if you're chasing a bull market run and you're wanting to acquire positions all the way up, you're just going to lower the threshold of percentage move that's needed.

42:53So you're going to have a lot more days that trigger that event, which is going to accumulate more Bitcoin for you. You can create the bias in whatever direction you'd like the bias. You can create a bias that trades one for one and every entry is correlated with a corresponding exit over whatever time period. And that would be something that would maximize the cash create opportunity within a very sideways market. Right. Then if it's a bull run and I have a large position and I want to accumulate more through the bull, I can set the bias on the buy side much higher than the sell side so that the sell side triggers don't happen as often.

43:36like maybe I want to sell during a bull run only on an up 15 % day. Well, I mean, that's a great day to sell a little bit, but that's not going to happen every day, right? That's going to keep me holding more Bitcoin longer, which in a bull run is what you want to do, right? And then inversely, if it's a bear market and you want to offload Bitcoin, you just change it to where your sell side is the aggressive sell side. So not only can I say, okay, let's say it's a bear market because we've reached the peak. We're at$250 ,000 Bitcoin price. We've all accumulated a bunch and now it's time to get some cash to take some cash off for the pullback.

44:19Well, you just set your sell bias to every day that it moves down by 1%, you're selling a little bit. Every day it moves down by 1.5, 2%, 3%, whatever. And then you can also set, okay, well, when it's down 1%, sell X number of dollars. So let's say I want to really exit cash quickly because we've reached the blow off top and I'm wanting to get out quick. Well, I'm going to say, okay, every time Bitcoin's up by more than 1 % in a day, sell 10 grand of Bitcoin. And every time it's down by 6 % in a day, buy$50 worth of Bitcoin. Well, that's going to deplete my Bitcoin stack pretty quickly, right?

45:10I'm selling$50 for every 10 grand I buy. And I've created an instance that's going to trigger a 10 ,000 sell quite frequently, right? Because the volatility of Bitcoin is something that really hasn't changed since its inception. You just have to continue to zoom out to get perspective of what the volatility looked like overall. But in each individual cycle, we've seen pullbacks of 30 plus percent. We've seen pullbacks of 50 plus percent. The volatility, in my opinion, based upon the fixed denominator of Bitcoin is here to stay. Because as inflation and real world dollars continue to be printed, the price of Bitcoin has to be adjusted to that.

45:53And it's not a live one-to-one adjustment. There's lots of delays in getting that money supply to the hands of people that ultimately buy Bitcoin, right? So three really important points of you guys have covered a lot of the technicalities. And so, you know, some 50 ,000 feet type stuff. So first, again, this is free. If you want to use this, this is free. This remarkable institutional technology is free. Go download it and use it. It's free. Two, we're talking about, because Ovi brought up volatility versus non-volatility, and how do you benefit from those? By the way, you can keep your volatility-focused algo inside the algo, so the arbitrage strategy is still running.

46:42You can set up another version of the algo right behind it or on top of it or underneath it that is the non-volatility version of the algo, and they're both running at the same time. You can have four different versions of that stuff with different percentages in different hard dollar amounts all running at the same time inside of the algo. In other words, this institutional level tool is not just doing one thing. It can do four things, five things, three things, eight things all at the same time. And then third, again, to Tillman's point, the ability to adjust immediately when you get a blow off top.

47:29Say, you know, at some point we blow off to 125, 130K in the next three months. And the arbitrage strategy is still doing what it's doing. You've acquired a certain amount of Bitcoin and now it's worth way more because we're up 50%, let's call it. And then you have another low volatility strategy running at the same time. But now you want to run a little bit of a sell side strategy. Again, it's not difficult to do. It's quick, click, click, click. And it's all happening for you while you're doing something else. While you're sleeping, while you're eating at a restaurant, while you're playing with your kids, while you're flying to vacation.

48:10If you move to Mars with Elon Musk for a year, it's still going to do what it's set up to do well and and let's talk about just the the let's talk about the laws of nature when you have an asset or anything that's volatile the only way to hedge against that volatility and to master it is through spreading out your entry points the the larger the the capital amount at a single point in time the more risk you have in your entry period the end there's no arguing that. Everyone has to agree upon it. It's taught in every university in the world. Diversification across timeframes lowers your risk of volatility.

48:59So when you are having a what looks to be a blow off top event, it's not the most prudent thing. It's the most risky thing to emotionally go, oh crap, we're having a blow up event. Let me sell 100 % of my Bitcoin stack and try to time that. That's exactly when the price will reverse against you. And you will be wondering if you have spyware on your computer and the market has the vendetta against you and why the world hates you because it will feel that way. And that's what the market's designed to do, to make you emotionally move. So the way you respond to that is by moving in smaller steps, taking a more diversified outlook and saying, okay, if I'm going to exit my position, I'm going to exit over 15, 20 different cells, and that's going to smooth your curve out.

49:57And so if you are wrong and the market is in a continuation pattern and continues to go up, maybe you've sold 25 % of your position, but you're still in 75 and you weren't wrong. And let's say the market continues to go down. You're going to have a systematic dollar cost average exit price that is a cumulative event over the course of multiple exits versus this one-time event that you're guessing is the right time for it to happen. Anytime you're guessing or anytime you're picking one point to move 100 % of your position in or out, you are incurring risk. And so by definition, having a piece of automation that's systematically looking for opportunities to take you out in smaller chunks, you're going to have a better price entry and exit, or i.e.

50:51you're going to remove some of the risk of the volatility in getting in and out of your positions. So volatility has to be just managed it's an opportunity but but it definitely has to be managed because it can cut both ways so if i wanted to i'm quite a degenerate like risk-taking trader if i wanted to create like a dgen version of this is there a world where i can set it so let's say i put in my starting capital and let's say i buy whatever a five percent backup or 2.5 percent backup can i set the amount that i would buy in that backup to be the entirety of my starting capital so let's say yeah okay i've started 10k if it falls two and a half percent i'm gonna buy 10k and i guess we just wait until it gets back up to yeah of that to sell it but um like is there a way we have that yeah you can be as aggressive as you want and let's say you had let's say you put in the most aggressive settings you could come up with and you had 10k in there well when it reaches you know when you start trading beyond the 10k you just are going to get trade rejection notices no harm no foul doesn't cost you anything it's not at the end of the world but those trades won't go through because you don't have the capital to to trade them no yeah i might do that maybe i won't go all in on the 2.5 but maybe i'll give myself like four or five strikes and then see what happens i regard uh somebody that we've talked to a multitude of times is jeff park over at bitwise uh are you familiar with him at all uh i'm familiar with bitwise but yeah not so much he's a great follow he's dgt10011 on twitter but he's one of the smartest guys in the space that I've ever come across.

52:49And he put out a tweet. Every tweet he puts out, I have to go run through Grok or some AI to figure out really what he's saying. But he put something out yesterday. It says, if you take the root vega approach to normalizing BTC volatility, the rough multiplier for duration is 9x on the conservative end and 25x on the aggressive end. So empirically true that one year in crypto is 10 years in real life. And so the point he's making, and I did run it through Grok and I got the explanation. The point he's making is that Bitcoin is nine times more volatile on the low side than the equity market and 25 times more volatile on the high side on any given year.

53:43And that opportunity of volatility is too big to ignore. That's why people are at a very sophisticated level looking at adding Bitcoin to their balance sheet as this force multiplier that has very limited downside risk. Because if you only have 5 % of your available cash sitting in Bitcoin, and even if it drops by 50%, you're down 2.5%. Well, 2.5 % is a rounding error in the annual increase or reduction in inflation rate. So you can get a lot of bang for your buck for putting a little bit of money to work. But when I ran through Jeff's tweet into ChatGPT and said, so what's the best strategy to take advantage of this volatility?

54:33And it spit out literally the exact definition of how we've built this strategy, the automated tool that we have. It's a intelligent DCA. That's the only tried and true method for removing the risk of volatility, but also capturing the opportunity of volatility at the same time. So I was pleasantly surprised. And again, Jeff, he's a great follow if you don't follow him. Well, just a reminder, and I don't think you saw it at the beginning of the show, you know, Bitwise is the sponsor of this show. and to some degree, you know, a bunch of Real Vision stuff. So their fans and Real Vision has a great relationship with them.

55:16And, you know, Jeff come from the exotic derivatives department at Morgan Stanley, which, you know, in and of itself, you have to have some, you know, you kind of have to dream in algorithms and dream in math to be able to work and be successful in that type of department. Ovi knows based on his time at Barclays. So it is a, but for the common guy, right? The common guy whose job it is not to sit at four screens for nine to 10 hours a day. And that's just traditional markets, by the way. Crypto is all the time on no matter what. In fact, I think the last buy that the ARB strategy did was like it, you know, I don't know.

56:04It was in the morning or early morning or late at night. And four out of the last five trades were overnight. Well, Sunday night's been a huge night of volatility in Bitcoin for the last like six, eight weeks. Huge night. It's the only time that the markets really move. An example of why having a plan, right, and this strategy gives you a clear plan. You know, we were talking to a customer of ours a couple of days ago, and he hadn't set up the whole thing yet and he was working on it. But he admitted to us that a couple of days ago, he panic sold 14 Bitcoin at 79K. Okay, just boom, panic sold 79K.

56:48Thought it was going lower. Just, you know, I can't have it go any lower. I got a couple of things that I got to do. Panic sold 14 Bitcoin at 79K. this is the you know this tool really helps you avoid mistakes like that yeah get you out of the way which is half the battle and in trading in my opinion is removing your your emotional responses from yourself basically exactly make it a little harder to to act recklessly um yeah one thing i i wanted to bring up during the call today which was an interesting um concept that i'd never thought of before. And I started running it past people and posted about it on Twitter, and it got quite the response, which is, you know, a lot of these, a lot of publicly traded companies are looking at Bitcoin, right?

57:39We've got 70 plus publicly traded companies that have adopted Bitcoin as a reserve strategy on their balance sheet. And then you have, you know, products like Bitwise who are creating, you know, ETFs that are specific to companies who have what they consider to be the Bitcoin standard as the core philosophy, a thousand plus Bitcoin on their balance sheet. And so you're looking at more and more companies are wondering, how does this work with my business and how can I incorporate it? And does it have value to incorporate it? And so this train of thought started to appear for me and I started to chase the proverbial rabbit and it led to some interesting things.

58:23So first of all, most small businesses, if they're successful over time, they accumulate cash. And most small businesses are so busy looking at their business, plumbing companies, construction companies, they don't have time to create sophisticated investment strategies. And so most of them will lump a lot of their cash into CDs or what they consider to be somewhat liquid yield returning assets. So I started thinking about, you know, that size of a company. How would I incorporate, if I had that type of a company, how would I incorporate Bitcoin into my overarching strategy? And it started with this central premise of risk.

59:11I love measuring risk, and I love to expose risk that I'm not aware of or that other people aren't aware of. And so there's this risk that we all incur by depositing money in banks. The risk is that the bank goes out of business. And banks are not traditionally very forthright as it pertains to telling us when they're going to go out of business. That's why the run on the bank happens, because they hold their water as long as they can, and then it finally bursts, and kind of you're stuck in the line of people out on the curb. And so I did some research and finding, okay, what's the historical rate of bank failures?

59:52And I think it's shockingly high, to be honest with you. There, since 2020, excuse me, 2000 to 2025, so 25 years, there's been 569 bank failures in the United States out of 4 ,000 total banks. So greater than 10 % of the banks that have started in the last 25 years have failed in that same time period. That, to me, is a shockingly high number. Then you start to dig a little deeper and you go, okay, how many banks are at risk of failing now? Well, according to the stats, 67 large banks are on the risk list now because they have over leveraged themselves in the commercial real estate space. And the interest rate increase has created pressure on their balance sheet.

1:00:41And so you start to look at this overage and then you start saying, well, the big banks don't fail. No, in 2023, a top 10 bank failed. In 2024, a top 10 bank failed. So no one's immune to the risk of your bank going out of business. I don't care even if it's kind of the top 10 banks. So if you take that as a consideration and you have cash over$250 ,000 in that bank, what's the chance, which one's a lower probability that Bitcoin goes to zero or that your bank goes out of business. Much, much more probable that Bitcoin does not have a 10 plus percent chance of going to zero. I just, I can tell you the smartest people in the world will agree upon that.

1:01:29And so there's this notion that I have that, you know, if you can't find an asset that has a better risk reward ratio and you don't need the cash for operations, but you want it in a highly liquid form, that scraping the excess of your cash reserves that are sitting in FDIC-insured bank accounts above the$250 ,000 mark and earmarking that to be DCA'd or intelligently purchased into Bitcoin would be a de-risking event. You're taking money that can go to zero and you're removing it from that zero percent or from that chance that it goes to zero and putting it at a higher percentage. And that's reducing overall risk in my estimation.

1:02:23So something to think about. It's food for thought. It's a very interesting notion that I don't think a lot of people pay attention to, But I would venture to guess that a lot of people have more than$250 ,000 in cash in their business account that's sitting there and needing to be somewhat liquid for emergency purposes, but also pretty much doing nothing for the business and has very little potential to help the business from a yield perspective and or from a growth perspective. It's an interesting idea. I think it makes sense. I'm curious to see what that landscape looks like in three years' time, if we do actually see small businesses and small people just have it, even if it's like a 1 % allocation to it.

1:03:09Exactly. That can be a meaningful return given the moves that you've often seen in crypto. Well, emergency funds are commonly used for households, right? And what do we consider an emergency fund? something that we keep highly liquid that's available when the world hits the fan, when everything goes bad. And I think if you look from a business perspective, and especially Silicon Bank failure, how many businesses did not have money or could access money to continue business operations? How many businesses sat there trying to figure out how they were going to make payroll? Well, Bitcoin could be a hell of an instrument for an emergency fund event for a business because no one can keep you from accessing it.

1:04:00You can immediately create liquidity out of it to make payroll and do the functioning things of the business. And it provides all of those safety nets in a way that no other instrument that I can think of provides. So it could be a trend. I think it will be. I think Bitcoin has some unique qualities to it from a publicly traded company perspective. Jeff touched on this on one of our podcasts, which is it really puts the fear of God in short sellers. And so it's a natural hedge against people shorting your public company. And if you look at Tesla, when they added Bitcoin, their shorts went way, way down.

1:04:40But there's lots of examples of that. But I think for private enterprise and for private companies, having an asset, as long as you don't need the cash in a four-year cycle period, having an asset that has that growth potential when margins are getting squeezed, profit margins are getting squeezed, could be a competitive advantage that allows you to take market share from your competition. That could be the very differentiator that allows you to make the company that you want to make as big as it can be. yeah that's going to be super interesting to watch i think um i think we'll see more and more of it and obviously test as an example at like a different level of scale but even on a personal level as well it's like you know when prices drop like this and you're just sitting on cash it's like is it a bigger risk for me to just stay in a lot of cash than it is to have bitcoin now bitcoin obviously has you have your own like safety risk so like don't lose my seed phase make sure i have it saved you know self-custody and all that kind of stuff and it's a separate thing but sometimes i feel like you know why bother keep you know obviously you need to pay for your living expenses and cash but why bother having savings so to speak um if you if you want it over a multi-year period um but with that i think we better um we better wrap it up as we're a little bit over time um if you guys want to check out um the arch platform that we spoke about today make sure you head over to realvision.com or slash arch um you'll be able to see all the details there um we should have a url yep right at the bottom of the screen here as well for you guys check out um um feel free to drop us your comments on if you've been using it how you found it um if you've been profitable if not been profitable um you know we're happy to uh i'm curious to hear all the feedback if you have a good recipe that works out for you during the week let us know i'm curious to try it out i'm definitely going to spend more time um setting this up for myself because i feel like i've missed out on a lot of trading because of being busy and other stuff and maybe this is a way to do it programmatically so um please please please do check it out um we will be back at the usual time again next week 11 30 a.m eastern time i believe it's still 3 30 p.m greenwich mean time next week in the week after until our clocks change but thanks everyone for listening um hope everyone has a great weekend and we will see you next week if you like this episode i'd love for you to head over to realvision.com forward slash join for a free membership.

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