Week 27, Trade 27 : LONG $JLP

Navigating a risk-averse market with a focus on stability and strategic capital preservation.

?? Week 27, Lesson 27

"A good trader is someone who manages to get out of a bad trade alive."– Gary Bielfeldt

We are into Week 27 of the Fifty Two Trades in Fifty Two Weeks. Thank you for reading.

“The 52” deep dives into one trade every week, targeting traders with zero or little trading experience. But I hope that my pro trader friends find this as useful. For details on why I am doing this and who is this for, please read the About section on top, which I will update from time to time.

Most trades that we take will be medium (3-4 weeks) to long term in nature. We might do some swing trading here and there if opportunity presents, but always with proper risk management. After all, our purpose is to make money, not lose sleep over it.

You can track our trades and progress live here at this Link

Over 10 years in banking and now 12+ years dealing with nuances of crypto, I have learned some very hard lessons. I intend to share them transparently as we go. More importantly, please keep the comments and feedback coming, so I know we are on the right track together.

Hashtalk Telegram

?? Portfolio Update - Open Trades

We continue to navigate the market cautiously, balancing between risk and reward. Stay tuned for more updates as we adjust our positions based on market conditions.We’ll continue to monitor the open positions closely and adjust as needed to navigate the range-bound market effectively. Stay connected on Telegram for real-time updates and insights.

If you have any questions, ideas, or feedback, please feel free to DM me on Substack or Twitter, Let's continue to navigate the market together!

THE IMPORTANCE OF RISK TO REWARD RATIO

One of the key principles of successful trading is understanding and applying the risk-to-reward ratio (R:R). This concept helps traders assess whether a trade is worth taking by comparing the potential profit to the potential loss. A solid risk-to-reward strategy ensures that even if a trader has a lower win rate, they can still remain profitable over time.

For example, if you risk $100 on a trade with a target profit of $300, your risk-to-reward ratio is 1:3. This means that even if you only win 40% of your trades, you can still be profitable because your winning trades outweigh your losses. Many professional traders aim for a minimum R:R of 1:2 or higher, ensuring that they don’t need to win every trade to make money.

How to Apply Risk-to-Reward in Your Trading Strategy:

1. Define Risk Before Entering a Trade – Always set a stop-loss level based on technical analysis rather than emotions. Know exactly how much you’re willing to lose before taking a position.
2. Look for High-Quality Setups – Avoid trades with poor risk-to-reward ratios, even if they seem tempting. A trade that risks $100 to make only $50 (1:0.5) is not favorable.
3. Stay Disciplined – Traders often let emotions take over, moving stop-losses or closing trades early. Sticking to your planned R:R ratio ensures consistency in your approach.
4. Backtest Your Strategy – Review past trades to see if your risk-to-reward approach has been effective. Identify patterns and adjust accordingly.

By focusing on trades with a favorable risk-to-reward ratio, you ensure that your winners are always larger than your losers, leading to sustainable profitability. Trading is not just about being right—it’s about managing risk effectively so that even small wins build long-term success.

?? Quick Macro & Crypto TL;DR

THE GOOD:

1. Institutional Adoption: MetaPlanet plans to acquire 21,000 BTC and 22 U.S. states propose Bitcoin reserve bills.
2. Manufacturing Recovery: U.S. factory activity expanded for the first time in over two years, boosting economic sentiment.
3. BoE Rate Cut: The Bank of England reduced rates to 4.5%, signaling a shift toward easing monetary conditions.

THE BAD:

1. Job Growth Slows: January nonfarm payrolls missed expectations, indicating a cooling labor market.
2. Eurozone Stagnation: GDP growth in major economies like Germany and France remains weak, raising concerns about long-term stability.

THE WORSE:

1. Inflation Data Exceeds Estimates: Recent U.S. inflation reports came in hotter than expected, higher than expected readings intensify inflationary pressures and could force the Fed to maintain a restrictive stance longer than anticipated, further weighing on market sentiment.
2. Emerging Market Pain: Mexico faces a precarious situation with postponed but looming tariffs, while EM bonds remain under pressure.

For more regular insights into macro and crypto trends, subscribe to our weekly newsletter: 5-Minute Macro and Crypto Weekly.

?? Week 27, Trade 27 : MOVING 50% STABLES TO $JLP

Market is experiencing a notable downturn, with major assets facing significant declines. $BTC has decreased by more than 6% since the beginning of February, trading at $95k level, with a month’s low at $91k. Other major assets like $ETH, and $SOL are trading at lower levels than their recent highs - with Ethereum near $2,620, and Solana in the mid-$190 range - indicating a clear downward trend in prices. Rather than being driven by a new, compelling narrative, investor sentiment appears muted and risk‐averse. There isn’t a standout story or innovative catalyst drawing fresh capital into the space right now.

This lack of a “hot” narrative suggests that investors are increasingly cautious—possibly waiting for clearer regulatory guidelines, more stable macroeconomic conditions, or a breakthrough technology to reignite market interest. Until such catalysts emerge, the market is likely to continue in its current state of consolidation or even further decline, with capital remaining on the sidelines rather than chasing speculative gains.

In short, the crypto market currently reflects a bearish phase where prices are falling and no clear, irresistible narrative is attracting significant new investment.

We maintain a cautiously bullish outlook on the broader market and we are positioning ourselves to preserve our capital and switch for a trade whenever we find a good risk-to-reward call.

Trade: Allocating $90K STABLES to $JLP

This week, we’re taking a measured step toward capturing stable yield in a market that continues to favor risk-averse strategies. We’re moving 90,000 USDT into the Jupiter Liquidity Provider (JLP) pool - an opportunity we believe offers both attractive fee-based returns and diversification benefits amid broader market uncertainty.

What Is JLP?

JLP is the native liquidity provider token on the Jupiter Perpetuals platform, a decentralized exchange on the Solana network. In practice, when you contribute assets (in our case, USDT) to the JLP pool, you become a liquidity provider. The pool supports leveraged trading by acting as a counterparty for traders who borrow assets to open positions. In return, liquidity providers earn fees on multiple fronts—ranging from trading fees to borrowing fees—automatically compounding as these earnings are reinvested into the pool. The token’s value is underpinned by a diversified index of assets including SOL, ETH, WBTC, USDC, and USDT.

Why JLP Makes Sense in Today’s Market

• Attractive Yield in a Cautious Environment: With market sentiment leaning toward risk aversion and few compelling speculative narratives, our focus is on generating steady, predictable returns. The fee-sharing model of the JLP pool—where liquidity providers earn approximately 70–75% of the fees generated from leveraged trading activity—means that our deposit is working continuously to compound returns. At an APY of 44%, even a short-term position over one or two months can deliver meaningful yield, effectively boosting our stablecoin holdings
• Diversification and Passive Income: JLP is not just a yield mechanism; it also provides diversified exposure through an index of underlying assets (SOL, ETH, WBTC, USDC, USDT). This built-in diversification helps mitigate some of the volatility risk while our capital earns passive rewards automatically. There’s no need for manual intervention—earnings are reinvested and reflected directly in the increasing value of the JLP token, ensuring a seamless compounding effect.

Expected Returns

• One-Month Outlook: With an estimated monthly yield of approximately 3.7%, our 90k USDT position should generate close to 3,300 USDT in returns over one month.
• Two-Month Outlook: Extending the position to two months could yield roughly 7.3%, equating to an additional 3,300 USDT, or a total of around 6,600 USDT in earnings.

By allocating our capital into JLP, we are capitalizing on a liquidity pool that not only provides stable, fee-derived returns but also contributes to the overall liquidity and stability of the Jupiter Perpetuals trading ecosystem.

This approach aligns well with our current market outlook—prioritizing consistent income over speculative play—and offers a compelling risk-adjusted opportunity in today’s subdued market conditions.the long call.

?? CONCLUSION

In this week’s trade recap, our focus has shifted toward capital preservation and steady yield generation amid a subdued and risk-averse market. With major assets like Bitcoin, Ethereum, and Solana showing notable declines and investor sentiment remaining cautious, we are deploying a defensive strategy to capture reliable returns while waiting for clearer market catalysts.

Highlights:

• Move into JLP: Allocating $90K USDT into the Jupiter Liquidity Provider (JLP) pool to capitalize on its attractive fee-sharing yield.
• Yield Generation: With an APY of approximately 44%, our position is expected to yield roughly 3.7% per month—translating to an estimated 3,300 USDT in earnings after one month and around 6,600 USDT after two months.
• Diversification & Passive Income: JLP’s value is derived from a diversified index of SOL, ETH, WBTC, USDC, and USDT, ensuring that our capital is not only earning fee-based returns but is also insulated through diversification.

We maintain a cautiously bullish outlook on the broader market and are strategically positioning our capital to preserve value while generating meaningful income in a low-narrative environment. These trades reflect our commitment to a balanced strategy, leveraging options to reduce cost while positioning for market gains. The prudent approach ensures we're prepared for any price movement, with risk management through stop losses and premium collection.

Stay tuned for more updates and insights! You can track all our trades here.

Now go grab a coffee and please DM for any questions. Keep in mind, this is NFA and DYOR.

For regular updates and alpha please join my telegram channel here: Hashtalk Telegram

Follow me on X here: Twitter

THANKS