How Web3 Levels the Trading Field For Novice Traders
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Advertisement     Crypto trading promises huge returns (and has been so in the past couple of years), but very few traders actually make sustainable profits. According to unverified reports, over 90% of crypto day traders lose money despite the market continuously witnessing mega gains. Why does this happen constantly? Are there solutions that can improve the win rate for crypto traders? The stats regarding the amount of losses crypto traders make are shocking, to say the least. In every market characterized by dual possibilities, trading should offer a 50-50 chance of either a potential profit or potential loss. However, the volatility of the crypto market throws the fundamental 1:1 risk/reward ratio out the window, with over 90%+ of traders making losses. According to a published report by Finansinspektionen, the Swedish financial supervisory authority, 53 percent of citizens who traded in crypto certificates (securities that include one or more underlying crypto assets that track the price of these assets) and sold off their entire holdings from January 2018 to March 2024, made a loss. A stark contrast to the gains the market made during the same period – with the total crypto market cap growing from $852 billion to $2.7 billion, or a 216% growth rate. In a broader view, Tradeciety reports that 80% of all day traders, whether in crypto or traditional financial markets, quit within the first two years of trading. Furthermore, nearly 40% of traders only trade for one month before calling it quits, and in three years, the number falls to only 13% of day traders. Five years? Only 7% of the traders keep trading. More importantly, the average investor usually underperforms a market index by 1.5% per year, while the active traders underperform by nearly 7% per annum. Across the crypto markets, these numbers drop…
Filed under: News - @ September 16, 2024 2:21 pm