Maximizing Investment Returns: Unleashing the Power of Intraday Bias and Circle of Competence

Alessio Frateily

Hatched by Alessio Frateily

Jul 28, 2023

4 min read


Maximizing Investment Returns: Unleashing the Power of Intraday Bias and Circle of Competence


In the world of investing, achieving optimal returns requires a combination of strategy, discipline, and self-awareness. In this article, we will explore two seemingly unrelated concepts - the intraday bias strategy for Ethereum (ETH) and Warren Buffett's concept of the Circle of Competence. While these concepts may appear distinct, they both offer valuable insights into maximizing investment success. By understanding and harnessing the power of intraday bias and identifying our circle of competence, we can make informed decisions and achieve better results in the market.

Unveiling the Intraday Bias Strategy for ETH:

The intraday bias strategy for ETH reveals an hourly recurring behavior that can be easily exploited with trading systems, potentially surpassing the returns of a simple buy-and-hold approach. This strategy highlights a statistical edge in going short on Ethereum from around midnight until 11 in the morning, with the lowest point occurring at 10:50. By rounding it off at 11:00, traders can capitalize on this intraday bias by going long from 11:00 in the morning until the end of the session, which typically ranges from 11:30 pm to 11:45 pm. The simplicity of this strategy lies in just two lines of code, instructing the trading system to go long at 11:00, go short at 23:50, and then go long again at 11:00 the next day. Additionally, each position opened using this strategy maintains a consistent dollar value, such as $100,000. By leveraging the intraday bias strategy, investors can potentially enhance their returns and outperform a traditional buy-and-hold approach.

Unveiling the Circle of Competence:

Warren Buffett's concept of the Circle of Competence offers a framework for investors to avoid problems, identify improvement opportunities, and learn from others. Buffett has long emphasized the importance of operating within areas one knows best, focusing only on businesses that can be correctly evaluated within their circle of competence. The size of this circle is not as crucial as understanding its boundaries. Buffett's approach echoes the sentiment of Tom Watson Sr., the founder of IBM, who famously said, "I'm no genius. I'm smart in spots - but I stay around those spots." Our circle of competence is built upon experience or study, encompassing areas of knowledge that we have developed expertise in. While some areas are universally understood, others require specialized knowledge for accurate evaluation.

Expanding the Circle of Competence:

Although the circle of competence is a personal construct, it is not a fixed entity. Buffett acknowledges that one can widen their circle of competence gradually over time. However, venturing beyond the boundaries of our circle too quickly or recklessly can lead to costly mistakes. Buffett provides an example of a business manager who achieved remarkable success by strictly adhering to her circle of competence. This manager, despite having limited knowledge of stocks, had an innate understanding of cash, furniture, and real estate. By focusing solely on her area of expertise, she was able to make informed decisions within her circle, leading to extraordinary achievements. This example underlines the significance of discipline and focus within our circle of competence.

Actionable Advice:

  • 1. Define Your Circle of Competence: To improve your odds of success in investing and life, take time to identify the perimeter of your circle of competence. Understand where your strengths and expertise lie and focus your efforts within that realm. Be honest with yourself about your limitations and never hesitate to say, "I don't know."
  • 2. Operate Within Your Circle: Once you have defined your circle of competence, make a conscious effort to operate within it. Resist the temptation to venture into unfamiliar territories where you lack expertise. Maintain discipline and stay true to the areas where you have a competitive advantage.
  • 3. Continuously Expand Your Circle: While it is crucial to stay within your circle of competence, it is equally important to continuously expand it over time. Gradually acquire new knowledge and skills that complement your existing expertise. Strive for growth and improvement, but do so cautiously and steadily.


By combining the insights from the intraday bias strategy for ETH and Warren Buffett's Circle of Competence, investors can develop a comprehensive approach to maximize their investment returns. The intraday bias strategy allows us to exploit recurring patterns in the market, while the Circle of Competence provides the framework for making informed decisions within our areas of expertise. Remember to define your circle, operate within it, and steadily expand its boundaries. By doing so, you can position yourself for greater success in the dynamic world of investing.

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