From Stability to Breakout: Trading Strategy Archetypes and Mindset Shifts in 2025

Forward the Original Title ‘Trading Buckets’

As a discretionary trader, it’s useful to categorise your trades into buckets.

Systematic and discretionary aren’t binary or mutually exclusive states.

At the extremes you have a fully automated trading system that is always ‘on’ and manages every part of the trading process.

On the other end is purely vibe-based punting with no semblance of rules or setups.

Technically, exercising any amount of discretion e.g. switching off your automated system or manually rebalancing it would be ‘discretionary’, so that definition is too broad to be useful.

Practically, my definition of discretionary trader likely applies to most readers:

• Primarily manual execution
• Oriented around technicals (levels, charts, order flow, news catalysts et cetera)
• Subjective determination in assessing whether a setup is valid and whether to take it
• Wide mandate in determining core components of a setup: risk, sizing, entry, invalidation, target, trade management

One important thing to note is that ‘discretionary’ shouldn’t be used as a synonym for ‘lazy’.

“Yeah bro, like, no two setups are ever the same init, so there’s no point testing anything it’s all just different init.”

The best discretionary traders usually have detailed stats about the markets they trade, setup playbooks, market regime filters, trading journals to optimise their performance, and so forth.

There’s at least a rough rules-based order within which they exercise their discretion, and with experience the rules get looser and discretion owns more of the process.

But that is something that is earned, not assumed.

In any case, in my opinion and experience, most +EV discretionary setups fall into three distinct buckets for which I’ve chosen some arbitrary labels:

1. Incremental
2. Convex
3. Specialist

The three variables that make up each bucket are:

1. R:R
2. Probability
3. Frequency

(1 & 2 can be married to get some sense of EV, but this is simpler to understand).

Let’s discuss each bucket in turn.

Incremental

Low R:R, high probability, medium frequency.

These are the trades that keep the lights on and keep you in sync with the market.

They’re not sexy, they don’t look good on social media, but these are the bread-and-butter trades whose returns can meaningfully compound when you have an edge.

Examples would be: market microstructure/flow trades, intraday mean reversion, statistical tendencies (e.g. time of day/weekend effects, post-news effects), range trading during low volatility, and so on.

The main risks with this bucket are edge decay and regime change.

Both are the cost of doing business. Intraday stuff comes and goes, and being on the wrong side of regime change is always expensive (study Gaddafi).

This is a productive bucket because it generally makes money and triggers frequently enough to both smoothen out your PnL curve but also give you useful information about the market and the underlying regime.

Convex

High R:R, medium probability, low frequency.

Most high time frame trades anchored around volatility expansion or regime change fall into this bucket.

By definition they don’t trigger particularly often, but when they do, the capturing some fraction of the large move is what gets you paid.

Examples would be: high time frame breaks, high time framed failed breaks, high time frame trend continuation, large catalyst/news trades, funding and open interest extremes, volatility compression breaks, and so on.

The main risks with this bucket are false starts, long waiting periods between setups, and difficult trade management.

Again, cost of doing business.

Typically with this bucket you may need to nibble at the same setup more than once and take some scratches before it plays out (if at all). You’re also more likely to fumble the trade management because this bucket of trades is usually more volatile and difficult to manage, which is why you’re getting paid for it in the first place.

This bucket typically drives most of crypto traders’ lifetime PnL. Properly sizing and catching big trend, breakout, unwinding, and so forth is what’s most likely to break your equity curve from fee drift.

Convex trades pay for the fee drift, churn, and variance that occurs in the Incremental bucket.

Or more colloquially, this is the ‘banger’ bucket.

Specialist

High R:R, high probability, low frequency.

This is the miracle bucket that comes around once every blue moon e.g. the recent liquidation cascade in perps, stablecoin depeg, tariff news (when it mattered), huge catalyst trades and volatility expansion.

Examples would be: sniping and compounding a low time frame entry into a high time frame swing trade, huge spot and derivative dislocations, huge cross-exchange arbs, filling stink bids at extremely discounted prices, providing liquidity in a thin/empty order book, and so on.

It requires one of two things:

1. Stuff to break.
2. Perfectly snowballing a high time frame idea with low time frame execution.

The first one is hard because it’s so infrequent. When it does happen, most people are caught with their pants down trying to avoid margin calls and managing existing positions with exchange infrastructure being very unreliable at the same time.

The second one is hard because high time frame price action is very volatile and noisy on lower time frames. This requires you to be extremely precise with your entry, invalidation, and then have the ability to hold a low time frame idea through a high time frame expansion while managing the trade appropriately.

The main risks with this bucket are much higher skill ceiling, the extremely low frequency, the high likelihood that you’re scrambling to survive instead of being in a position to capitalise when they come about, execution risk (slippage into a thin book, liquidation risk), and so on.

These trades are very hard but if you catch one, it can change your career as a trader.

What makes these trades so attractive is the same thing that makes them so dangerous in the first place.

It’s very smart to have a ‘crisis cash pool’ of stablecoins that you don’t touch and deploy exclusively for these opportunities.

Conclusion

Go through your journal or playbook and try to categorise your trades according to these buckets.

If you don’t have a journal or playbook, at least you know where to start.

Another useful insight (by omission) is that there are a lot of buckets that aren’t worth your time e.g. boredom trading firmly falls into low R:R, low probability, infinite frequency.

That is not a productive use of your time and capital.

If you’re a developing trader, most of your time should be spent in the Incremental bucket to get data, build a system, refine it, and hopefully give you enough capital and experience to allocate into other buckets.

You don’t need to choose a single bucket and live there forever.

It’s much more valuable to build a playbook that accommodates all three of them, and more importantly, sets realistic expectations for R:R, probability, frequency, risk, and what those setups might look like.

For example, taking Convex setups but managing them like Incremental setups is a bad idea. Similarly, taking Convex setups and sizing them as Incremental setups is also a bad idea (personally my biggest weakness as a trader).

So it helps to know what you’re signing up for and adjust accordingly.

I didn’t make specific prescriptions with regard to R:R, probability, and frequency because it varies a lot and depends on market conditions. During hot bull markets there may be a Convex setup every week, meanwhile during worse conditions you jump for joy when an Incremental setup appears.

Lots more to write, but will stop here for now.

Cheers.

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