What to Be: Vladimir Koen on His Path From a Currency-Exchange Operator to Crypto Trading

In the “What to Be” column, the ForkLog editors ask professionals to share with our readers tips on how to start a career in the crypto industry and related sectors. In previous issues we learned how to take up on-chain analytics, blockchain jurisprudence, smart contract programming and in general to find your first job in our field. And today, by personal example, a representative of perhaps the most stressful, but no less attractive, profession — crypto trader Vladimir Koen — shares his experience.

ForkLog: How did you come to trading and how did your career unfold in the industry? 

Vladimir: I began earning serious money on the financial markets in the early nineties. The agony and breakdown of the USSR were accompanied by numerous monetary reforms and hyperinflation. Helping acquaintances and relatives exchange banknotes that were leaving circulation, I realised this was a great way to earn money. You simply swap one paper for another and gain quick profit. Privatization followed; I bought vouchers and certificates and sold them in bulk. That’s how I got introduced to the securities market. At the same time I started currency exchange.

In 1992 inflation in Ukraine and Russia exceeded 2000%. Prices could double overnight. So converting coupons and rubles into dollars became the rule. Regular clients appeared; I brought in assistants. Money was carried in bags. Transported in minivans. Turnover grew, and in my fourth year at university I switched to distance learning and opened my first currency-exchange point on Khreshchatyk. It was serious business by then. We worked around the clock and accepted more than 20 currencies. I began developing wholesale exchanges, cooperating with banks, tour operators and expanding aggressively. Within three years I had three companies, 36 exchange points and more than 60 employees. We grew so fast thanks to stable round-the-clock operation, flexibility and reliability.

This was a highly risky and stressful business, but I enjoyed its dynamism. I have loved mathematics since childhood, and essentially every day I needed to forecast price movements and analyse the factors that influence them. That shaped skills that proved useful in trading. Even then I concluded that asset pricing largely depends on hype, fear and crowd sentiment.

In 1999 I began trading on the Russian stock market. After the 1998 default, many stocks were severely undervalued. I invested free capital in gold, and it proved to be one of the best decisions. Banks started to stock gold bars. I bought as low as $250 per ounce and later sold to a friend who opened a jewellery factory and a chain of stores. Up to 2010 this remained a solid alternative income. In 2003 I opened a brokerage for the Forex market, a logical evolution from cash currency exchange online. Then I created a securities trader and an asset-management fund focused on the US stock market. Plenty of clients came to me from my previous ventures.

Although I had heard about cryptocurrencies since 2010, the story of Mt. Gox and Silk Road kept me from investing in this asset class. It was only in 2017, when the sector showed resilience and decent exchanges appeared, that I decided to invest — first in Bitcoin. The average price turned out to be around $2000 per BTC, and in October I sold off in parts around $4500–$5000, considering it a strong exit. Such margin in a short time on traditional finance is rare.

Regular trading and investment in cryptocurrencies began for me only in 2018. That year was fairly difficult: liquidity left the market, disappointment set in, and most assets fell in price. I concluded that on the crypto market it makes sense to trade only when there is a healthy inflow of liquidity and volatility. When the market is in a bear phase or a flat, it is better to study new projects and directions. Trading in such periods is exhausting; time and energy spent do not pay off.

ForkLog: You say you started in the 1990s, when there were all sorts of pyramids and tremendous financial illiteracy. Didn’t you feel something like déjà vu in 2017 during the ICO bubble? 

Vladimir: Well, this story is ancient. The term “Ponzi scheme” refers to its creator — an Italian man who lived in the early 20th century. But similar money-making schemes in various forms have existed for a long time. It is a banal exploitation of human greed.

I already had substantial venture experience. I liked the idea of crowdfunding. But the ICO projects didn’t inspire trust. Their similarity to financial pyramids lay in promises of token price growth not backed by economic models, and the fact that millions of people bought coins that nobody needed hoping to get rich quickly.

My startup-investment experience taught me to be cautious and very careful when selecting a project, so I simply observed and studied the market. The main investment rule is to preserve capital. Unfortunately, popular fundraising models drew the same scammers from MLM, making the term ICO synonymous with scam.

ForkLog: In your view, what is the main difference between the traditional securities market and the crypto market? 

Vladimir: Across my trading career I tried trading across different markets. My curiosity and desire to learn new things yielded big gains and big losses. I see similarities between the crypto market and the energy market: both are highly volatile, hard to predict and prone to manipulation. In crypto, it’s whales; in energy, it’s governments, DAO and corporations. When big players profit, the majority of traders lose capital. Statistics show that only about 1% of oil contracts ultimately lead to physical delivery; most are pure speculation. Volatility and leverage attract thrill-seeking traders. I’ll share a couple of interesting anecdotes.

Canadian trader Brian Hunter traded natural gas. The energy market is cyclical: it’s pricier in winter and cheaper in summer. In autumn 2006 Hunter began buying futures on natural gas. But the price didn’t rise; he did not want to incur a large loss and decided to manipulate. He tried to reverse the trend by expanding a highly leveraged position. It ended with him losing about $6.5 billion and bankrupting his fund. If you look at the natural gas price chart, you’ll see wild swings. It can rise tenfold in a year and fall just as quickly.

Another lesser-known story related to energy markets is about Warren Buffett. From 2006 to 2008 Berkshire Hathaway actively bought ConocoPhillips shares; things were going well until the 2008 financial crisis when oil prices and the stock market collapsed. As a result, the package fell about 60%, and Berkshire Hathaway incurred losses of about $3.7 billion on that position.

One feature of the crypto market is that it operates 24/7, 365 days a year. Regulation changes frequently and varies by country. In many jurisdictions the crypto market operates in a grey area, which creates risks. There are no universal laws and rules, allowing large players to manipulate prices and giving rise to a large number of scam projects.

The idea of decentralisation and free, independent finance is what drew me to this market. I have lost much to bank and broker bankruptcies, and I am tired of financial regulators. But I did not expect that every year a huge number of useless, outright fraudulent projects would emerge.

This makes entry harder for newcomers. Essentially, crypto remains venture capital in many respects. There are few high-quality project-evaluation systems; trading is often driven by expectations and hype. Yet I believe in quality growth and in the ability of decentralised finance and blockchain to displace traditional financial institutions, and DAO will replace many governance bodies.

ForkLog: You’ve already told about the phenomenal failure of Canadian trader Brian Hunter. Tell us about your most disastrous trade? 

Vladimir: This is a fresh story about how waves of short squeezes hit my WAVES position hard. It was particularly memorable because it coincided with the start of the war in Ukraine; I was under immense stress and made a series of mistakes. Then Alameda played against the Waves ecosystem, persistently pushing down the price of their USDN stablecoin. I understood WAVES was next.

On February 23 my grid bot on futures started taking short positions from $12. I received a signal from the platform when almost all the margin of $500,000 was in this position. I realised this was an artificial pump, with no fundamental reasons for growth, and to avoid liquidation I added another $200,000. But the WAVES price continued to rise while USDN fell. The all-time high was $41, and I set a stop at $55. But the price surged to $64! And two months later it fell to $4, seven months later to $2.

What’s especially painful in such cases is understanding that the position would profit in the long run, but risk-management rules require closing and realising losses to avoid wiping out the entire deposit. When prices fall there is a floor, but when they rise there are no limits. In this case I also violated important trading rules: don’t trade under strong stress, and when things aren’t going to plan — close the position. Don’t prove to the market with your own money that you’re right.

ForkLog: How do you distinguish between a professional trader, an amateur and a gambler?

Vladimir: The main difference lies in the attitude to trading. For a trader, this job is not always pleasant; sometimes it’s tedious. The main goal is to deliver results.

Gamblers care about the process itself. Money is a drug that provides them with intense emotions. Profit is not the main aim; when luck goes their way they go “all-in” and lose everything. They act impulsively, don’t learn from mistakes, and are driven by sheer luck.

A professional trader carefully decides whether to enter the market and when to quit. This is one of the key skills — after closing a profitable trade, not opening a new one immediately.

Amateurs often increase position sizes after a good run, and if they incur a loss they take on more leverage to recover it, regardless of whether the moment is right or the price is suitable.

Professionals adhere to a defined plan, a strategy, and strict risk management. The main aim is to preserve capital, not chase quick profits.

ForkLog: Let’s talk about education. There are countless groups, courses; traders open their Instagram pages and invite people to learn. What’s your view on this?

Vladimir: Any training is better than none. If you don’t understand how the market works, it’s better not to trade or follow someone’s advice. It doesn’t matter if it’s some guru, an experienced trader or just an Insta blogger. If you are promised multipliers after two weeks of training, the profits will go to the course sellers, and you’ll end up with costly experience.

Trading is a profession that isn’t for everyone. Not everyone can be a firefighter, programmer or writer. It requires certain abilities, and you can endlessly take courses but not earn money.

If you hear phrases like “all-in,” “go all out,” “guaranteed earnings,” “thousands of Xs,” “easy money” — that’s not a professional approach, but a scam.

ForkLog: And what about the phenomenon of public traders? It seems like a precise, focused profession. Yet some people switch on a camera and stream on Twitch while at the terminal. 

Vladimir: It’s not for me to judge others. Practice shows that big money loves silence. In traditional finance, a trader is not a public figure. That said, things are changing. There are traders who regularly publish their trades online, but that’s more of a phenomenon than a rule.

ForkLog: You say trading isn’t for everyone. Let’s sketch a psychological profile of the future trader. What qualities should they have? Who is this for?

Vladimir: First and foremost a trader must possess high intellect, patience, mental resilience and the ability to analyse large amounts of information. A systematic approach is crucial, as is the ability to make quick independent decisions. I often see people in crypto trading chasing gurus, signals, ready-made solutions. With that mindset there’s little chance to master the profession.

The most important thing for a trader is to follow risk management and discipline, to be able to develop trading strategies, adapt them, analyse the market and one’s own behaviour in it. To keep learning constantly. Crypto is a new market with rapid changes in regulation, new technical developments, new coins, protocols and hype topics.

Experience shows that the best results come from teams. Notice how few famous self-made traders exist. There are far more successful funds. The reason is that this is a demanding job with a heavy psychological load. One person cannot keep up with huge information flows and make balanced decisions. There are many cognitive traps and perceptual biases that can kick in once a position is open.

Many times, when I allowed traders to work from home, their results deteriorated after a while. Maintaining discipline in an office is far easier. A well-assembled team yields more stable results. Talented analysts who uncover excellent trades or undervalued assets often lack the confidence to open large-volume positions. They freeze up when things go wrong, and do not close losing trades in time. Proper distribution of roles significantly raises the efficiency of traders and analysts.

The trader must be prepared that this is serious work; sometimes very dull, sometimes it brings many negative emotions because the market often behaves irrationally and moves not according to plan. You can do a solid analysis, do everything right, but news and events can have a strong impact. The trend has shifted now thanks to ETF — just as in 2017 or after China banned crypto in 2019.

Patience is crucial. Many rotate their portfolios daily, trying to jump into coins that pump. Statistically, this only worsens outcomes. As old Buffett said: even if nine women get pregnant at once, you won’t have a baby in a month. There is a certain period during which a position yields the maximum profit.

ForkLog: Where do you advise beginners to get fundamental information?

Vladimir: If you want to trade on financial markets, you need to understand how the economy works, how prices and trends form. How exchanges operate and how interest rates work. What generates profitability. This will help you avoid letting your capital drift into scam projects. The key lesson I’ve drawn from trading across markets is liquidity. Is there real liquidity in the market? Where does the inflow of capital come from, especially large-cap inflows that drive trends? Because it’s their job to flip the trend from bear to bull. It’s those big players who buy assets from the crowd when fear and apathy grip the market.

For those who want to pursue this, start with classics such as “Japanese Candlesticks” and Steve Nison’s Beyond the Japanese Candlesticks. I studied John Murphy’s “Technical Analysis of the Financial Markets.” I can also recommend:

• “How to Make a Living Day Trading” by Andrew Aziz;
• “The Ax­ioms of Stock Market Speculation” by Max Gunther;
• “Technical Analysis” by Jack Schwager;
• “Trading Psychology” by Brett Steenbarger.

They’re worth studying, because the methods of analysis described in them are widely used. If you want to trade on a DEX, you will certainly need to study deeply how it works.

ForkLog: Many say that technical analysis doesn’t work. How would you explain to skeptics that it does?

Vladimir: If you wanted to hammer in a nail but hit your fingers, the problem is probably not the hammer. Any tool can be used properly. Technical analysis works for the simple reason that it’s used by the majority of market participants. Millions of algorithms and bots generate signals and act on the basis of technical analysis. All of this creates patterns on charts that regularly recur.

But it’s important to verify what, when and how it works, and to filter out false signals and noise. For example, I analysed the popular “golden crosses” on daily Bitcoin charts. Over the past six years, implementation was less than 50%. Yet headlines keep presenting it as a buy signal. The moment a “golden cross” appears, everyone starts writing about it. And the market continues to fall. This is why quality education matters.

To decide to buy or sell any asset, you need a holistic analysis. It’s important to be able to find patterns yourself. Study cycles, align with the calendar of important events. Transaction analysis, tracking wallets — these are important tools. Traders are often confused by arbitrage transfers. There is a list of key indicators that most traders rely on, and most, I should remind, move the markets. These include RSI for overbought/oversold status used on most markets. Then candles as a convenient, visual tool. Fibonacci levels — proportions that work in physics and mathematics and appear all around in nature. I believe people subconsciously highlight these levels when analysing price movement. You must understand that one indicator, or even ten together, cannot reliably give more than about 70% accuracy. It’s all about probabilities, and it depends on how you evaluate and use them. And fundamental analysis is very important. I don’t make decisions without it.

ForkLog: And where do you learn technical analysis?

Vladimir: There are plenty of courses on TA. I think you can take traditional courses, which are likely cheaper, and there are many free books and videos on the internet. From there it depends on how you apply the knowledge. It’s important to determine whether these chart patterns and indicators actually work on your chosen asset. If you trade algorithmic bots, you need to learn for yourself how it works. If you simply delegate funds to a bot without knowing its settings, you will likely lose money.

ForkLog: What are the main risk-management rules?

Vladimir: The correct asset choice. The amount of capital you are willing to lose. First you should create a trading plan and stick to it. If something goes off plan, halt trading, trim positions, close or revise. Before opening a position, ask yourself:

• How long are you willing to hold it?
• What could influence the price?
• Are you willing to add?
• Is a stop needed in this position?

Set several targets, and ideally close in parts. Stops are mandatory for short positions.

Don’t invest more than 5% of your capital in a single trade and no more than 50% of your capital in one asset. It’s important to constantly monitor your psychological state, not give in to impulses or impulsive trades. Keeping a trading journal where you record the time, reasons for opening and closing trades, and your emotional state at the moment is one of the best tools for improving your trading quality.

Avoid the temptation to make impulsive trades right after a long streak of losses or gains. For example, adopt a rule — five trades, then a 24-hour break. Don’t increase positions if you’ve made profits quickly. This is one of the most common reasons for losses among even successful traders. The opportunity to make money is always there. Focus on quality, not quantity of trades.