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14:32
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Originally posted by alphaduck:
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Its worth thinking about why day traders and swing traders are conspicuously absent in rich lists where as you do occasionally see people who have just held one or a handful of assets. I think its just harder to scale short term trading. Yes you can compound a lot of small wins but that is also a lot of hard work, a lot of stress and a lot of systematizing what you do is needed to control risk and always you are vulnerable to other traders with better information and better systems than you have who are playing the same zero sum game or even those playing the long game who snap up your inevitably miss priced entries and exits. The successful traders I think move on to other things, either starting their own funds, retiring without making it exceptionally big or becoming longer term traders. Above a certain level of wealth you have to also move to larger pools of liquidity or the return on mental effort just becomes too low. I think the analogy to professional poker players really fits for day trading. You may find persistent ways to provide liquidity to the market and there is real value you are providing there but most of the time you are just trying to scalp other players and when you play that game how confident are you that you are not the one being set up or scalped? bag holders might be better or worse traders or gamblers but they dont have to get it right over and over. My biggest win was buying ETH at the ICO and sort of just holding it for 13 years. That was pure luck, no one could have predicted the mad gains but can you imagine trying to get that same result as a day trader in crypto. Theoretically pure technical analysis should even work better because there is very little in the way of fundamentals its all narratives and trends and emotions and if you are good at intuiting or or being a quant that does not care about the underlying asset should be a paradise and indeed some firms do well I guess but not your average day trader I would expect. The average day trader is less pure in regards to being agnostic to the underlying asset than they likely want to admit. At least the ones hanging out in the forums for the asset in question. What has anything said in here got to do with short term / technical investing? The only explanation I have for that is a cynical one. If you are not truly confident in your ability to have an edge trading technically there is a possibility of manufacturing one through narrative manipulation. That or its just feeding the id or the ego and other forms of emotional regulation. I'm guilty of that.
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And then they could just be "Picking up Pennies before Steam Rollers".
(20min delay)