Introduction to Trading

90% of traders lose 90% of their money in the first 90 days. WHY?

This is an old statistic but it should come as no surprise that retail traders consistently lose money. In this post I hope to provide a basic explanation.

Firstly, the most insidious pitfall faced by traders is the 'educators'. The educators (or gaylord influencers) who promote and educate the public on trading are directly incentivized by traders' losses. This is because they earn a cut from any revenue made by an exchange from the traders they introduce, and it just so happens that the more you lose the more the exchange earns. There is a certain rigged methodology pedaled by educators which is designed by the exchanges (who pay the educators) to ensure traders lose as much money as possible as quickly as possible. If they fail to pedal this methodology then not only do they harm their own profit potential, but the exchange will refuse to work with them, and it is very likely to be illegal for them to continue working as a 'trading educator' without a referral agreement with the exchange. Yes, this is not just a scam, but a scam enshrined in law all over the world. I am of course talking about Introducing Broker (IB) agreements. Although the legal mechanics of this system might change over time the fundamental incentive structure is consistent.

The rigged methodology:

1. Trade as frequently as possible.
2. Gamified trading experience
3. Expect to earn a consistent income from trading
4. Trend analysis without a deeper understanding of what drives the markets
5. Chasing news and social sentiment
6. Don't keep a position open overnight
7. Stoploss
8. Unrealistically precise market predictions

Secondly, exchanges have complete information about all the orders, positions and potential liquidations on the table, and they dictate the order of transactions in real time. This allows them to execute high frequency trading strategies and market manipulation to extract value with low risk. Notice how the rigged methodology above makes the retail trader maximally vulnerable to exploitation using these advantages! Some exchanges sell this privilege to professional traders, but their real product is the sheeple traders ripe for exploitation.

So is there real opportunity for everyday traders to make money? Yes. Where there is volatility, there is the opportunity for traders to make money. Is this just luck? Nobody can say for sure.

My advice if you want to be a trader:

1. Understand the pitfalls.
2. Understand the difference between investment (owning strong assets) and trading (betting on the markets).
3. Invest more than you trade.
4. Understand what drives supply and demand in a given market.
5. Understand that volatility is the lifeblood of a trader.
6. Consider exploring LSTM ai models (you can make them yourself)
7. Don't make unrealistically precise bets. Don't overleverage
8. Practice patience and don't use stoploss.
9. Expect losses
10. Do not expect to earn a consistent income.
11. Avoid memecoins because the markets are rigged.
12. Pay attention to funding fees

Further reading:

Lecture by Anton Kriel on the same topic. He's trying to sell some bullshit scheme, but still provides a thorough and compelling explanation of this same topic.
Youtube

Build your own IB agreement:
GenieAi

Coin market cap. Read the comments. These are the fuckers I warned you about. If you follow their links then they make money out of your losses:
Coin Market Cap