INTRODUCTION TO TRADING
90% of traders lose 90% of their money in the first 90 days. WHY?
This is an old statistic, but it shouldn't be surprising that retail traders consistently lose money. In this article, I hope to provide a basic explanation.
First, the most insidious trap traders face is "educators." "Educators" (or influencers who promote trading) who promote and educate the public about trading are directly incentivized by traders' losses. This is because they earn a commission on any revenue an exchange generates thanks to the traders they introduce, and it turns out that the more you lose, the more the exchange earns. There is a manipulated methodology promoted by educators, designed by the exchanges (which pay the educators) to ensure that traders lose as much money as possible, as quickly as possible. If they don't promote this methodology, they not only harm their own earning potential, but the exchange will refuse to work with them, and it's highly likely that it will be illegal for them to continue working as "trading educators" without a referral agreement with the exchange. Yes, this isn't just a scam, but a scam sanctioned by law worldwide. Of course, I'm talking about "Introducing Broker" (IB) agreements. While the legal mechanisms of this system may change over time, the fundamental incentive structure remains consistent.
The manipulated methodology:
Trade as frequently as possible.
You can earn consistent income through trading.
Lines on charts > deeper understanding.
Don't hold a position overnight.
Stop-loss orders.
Unrealistically accurate market predictions.
Secondly, exchanges have complete information on all orders, positions, and potential liquidations, and they dictate the order of transactions in real time. This allows them to execute high-frequency trading and market manipulation strategies to profit with low risk. Notice how the manipulated methodology described above makes the retail trader extremely vulnerable to exploitation using these advantages. Some exchanges sell this privilege to professional traders, but their real product is unsuspecting traders, ripe for exploitation.
So, is there a real opportunity for everyday traders to make money? Yes. Where there is volatility, there is an opportunity for traders to make money. Is this just luck? No one can say for sure.
My advice if you want to be a trader:
Understand the pitfalls.
Invest more than you trade.
Understand what drives supply and demand in a given market.
Understand that volatility is your livelihood.
Consider exploring LSTM AI models (they are easy to create).
Don't make unrealistically precise bets.
Practice patience and don't use stop-loss orders.
Be prepared to lose often while you learn. Don't expect consistent income.
Avoid memecoins because the markets are manipulated.
Pay attention to funding fees.
Further reading: Anton Kriel's lecture on the same topic. He's obviously trying to sell his own scam, but he does a better job of explaining things than I do, and he delves deeper into the "reverse investing narrative."
#crypto #trading #investing
90% of traders lose 90% of their money in the first 90 days. WHY?
This is an old statistic, but it shouldn't be surprising that retail traders consistently lose money. In this article, I hope to provide a basic explanation.
First, the most insidious trap traders face is "educators." "Educators" (or influencers who promote trading) who promote and educate the public about trading are directly incentivized by traders' losses. This is because they earn a commission on any revenue an exchange generates thanks to the traders they introduce, and it turns out that the more you lose, the more the exchange earns. There is a manipulated methodology promoted by educators, designed by the exchanges (which pay the educators) to ensure that traders lose as much money as possible, as quickly as possible. If they don't promote this methodology, they not only harm their own earning potential, but the exchange will refuse to work with them, and it's highly likely that it will be illegal for them to continue working as "trading educators" without a referral agreement with the exchange. Yes, this isn't just a scam, but a scam sanctioned by law worldwide. Of course, I'm talking about "Introducing Broker" (IB) agreements. While the legal mechanisms of this system may change over time, the fundamental incentive structure remains consistent.
The manipulated methodology:
Trade as frequently as possible.
You can earn consistent income through trading.
Lines on charts > deeper understanding.
Don't hold a position overnight.
Stop-loss orders.
Unrealistically accurate market predictions.
Secondly, exchanges have complete information on all orders, positions, and potential liquidations, and they dictate the order of transactions in real time. This allows them to execute high-frequency trading and market manipulation strategies to profit with low risk. Notice how the manipulated methodology described above makes the retail trader extremely vulnerable to exploitation using these advantages. Some exchanges sell this privilege to professional traders, but their real product is unsuspecting traders, ripe for exploitation.
So, is there a real opportunity for everyday traders to make money? Yes. Where there is volatility, there is an opportunity for traders to make money. Is this just luck? No one can say for sure.
My advice if you want to be a trader:
Understand the pitfalls.
Invest more than you trade.
Understand what drives supply and demand in a given market.
Understand that volatility is your livelihood.
Consider exploring LSTM AI models (they are easy to create).
Don't make unrealistically precise bets.
Practice patience and don't use stop-loss orders.
Be prepared to lose often while you learn. Don't expect consistent income.
Avoid memecoins because the markets are manipulated.
Pay attention to funding fees.
Further reading: Anton Kriel's lecture on the same topic. He's obviously trying to sell his own scam, but he does a better job of explaining things than I do, and he delves deeper into the "reverse investing narrative."
#crypto #trading #investing
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