Thread by @RobotDefi

Do you actively trade your #crypto? Or do you buy and #HODL?

Ever aspired to be a day trader? Or at least be much more active in trading?

Ask anyone though, and they'll tell you "DON'T DO IT!" There are many reasons why that is...

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Once upon a time, to day trade stocks, you needed AT LEAST $50k. And the reason is simple math. If you're trading a $6 stock, and intraday gain is only to $6.75, one share only makes you $0.75 profit. So you need a LOT more.

That's out of reach for most.

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For traders with smaller bags but bigger dreams, the futures markets were born.

Here, you can trade on leverage. Did you know that for every $1 in price of Crude Oil, a crude oil futures contract is worth $1k?

So if oil goes from $98 to $103, that represents $5k.

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You can even get started with an account for a few thousand. However, futures contracts are dangerous.

Why? Because while the upside is unlimited, so is the downside.

If you long a crude oil contract (for example) that dumps, you owe $1k for every dollar it went down.

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In my humble opinion, #cryptocurrencies and specifically #cryptotrading offer a substantial opportunity for active traders with less means or who wish to limit downside.

I'll explain why in a moment, but first lets look at some study data.

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A comprehensive study done (albeit 20 years ago) on the Taiwanese stock market and other Asian markets found that only 1.6% of day traders were profitable!

Most of the stats shared from this study show that traders tend to hold onto losers and sell winners

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It also showed that losing day traders were very active (though not as active as winning traders).

And that long stretches of losses didn't stop active traders (likely because of a lack of feedback loop as humans need it to improve..but that's another thread)

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Ultimately the stats are grim, which is why the majority of people tend to do better buying and holding.

There are some insights that can be gleaned from the studies though.

For starters, traders that widely diversified did better.

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Also, traders that didn't continue to learn (outside of simply trading) did worse.

All this tells us that:
- If you diversify
- And continue to master your craft
- Learn to cut losses early

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- Learn to recognize a winning streak
- Follow rules
- Recognize biases
- Don't let current economic situation sway you

Then you can be a successful active #cryptotrader

BUT WAIT...what are you actively trading?

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All of the current available education and conventional wisdom says to stay in blue chips where there's a ton of liquidity (mainly $BTC and $ETH)

Why?

Well, that's old-school stock trader mentality.
Think about it...

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The people who created this #DayTrading thing were having to trade hundreds or thousands of stock shares at a time. That required a lot of liquidity.

And currently crypto mimics stock shares way more than futures contracts (watch as synthetics get a lot more popular tho).

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But I want to make the case for why I think $hitcoins represent the greatest opportunity for fast wealth creation for active traders today.

And again, it's simple math...

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Take a look at this chart.

It's a day in the life of $ETH. If you had been skilled (or lucky) enough to read the candles and predict that sharp move upward, you could've 1.054x'd your money.

For every $2893 you invested, you'd have gotten $3050 (minus gas)

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That's not bad.
However, take a look at THIS chart.

This random BSC $hitcoin jumped 11x in a day. AAAAND it was less than a penny.

That means, you could've turned a meager $100 into $1100!

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Now, this is NOT financial advice. I'm NOT telling you to go out there and day trade $hitcoins.

I'm simply making a case for the opportunity of active trading in micro-caps.

Limited downside + greater upside = #Winning

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If you want to learn more about the studies, check out this article which outlines their stats and references the research:
tradeciety.com/24-statistics-…

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If you found this thread entertaining or insightful, I have several more so consider following (if you aren't already).

CHEERS!

🧵/finis