80% of Traders Lose Money — Here’s the Alternative
HODLC makes the headaches that come with speculation, and the abysmal slowness of traditional savings vehicles, a thing of the past.
Our brains are amazing, but they’re not perfect. We may fear an unlikely event like being eaten by a shark or dying in a plane crash, but remain unconcerned about heart disease or a head-on collision with an eight point buck.
You would think that, at least in life and death matters, we’d be better at being objective. But the opposite seems to be the case: the more that’s at stake, the less likely we are to keep our cool. Pressure can lead to bad decisions, but it’s not the only reason we misstep. In the context of managing our assets, it often boils down to lacking (or sticking) to a plan, but making one in the first place takes insight that’s hard to gain without the back and bank breaking experience.
Is it impossible to make money in the stock market or the Forex?
No, but the overwhelming majority never do.
It’s clearly a lot harder than a lot of yacht owners think. 80% fail as the result of mismanaged emotions, sloppy thinking, bad luck, or some combination of the three.
We all have biases, but by learning about them we can figure out how, in the future, we can become better at reasoning. If you’re reading this, chances are you aren’t going to fall prey to Martingale-style thinking — doubling your bet after every loss. You also know that hot hands are a myth and a string of losses will not make your next position more likely to be a success.
The availability heuristic leads us to mistakenly generalize. A news story about a series of car thefts may lead us to believe it is a common occurrence, even if we live in a neighborhood where it has never happened. We would be wrong to think it will never happen simply because it hasn’t yet. We may, maybe with some confidence, say it is not as likely to happen in our neighborhood as in another, but that’s not a guarantee.
The similarity bias has surely been the downfall of more than one would-be Wall Street hero. We tend to assume situations that look alike will have the same outcomes. The resemblance may be superficial. As two assets, or for that matter the same asset on two different days, are never identical, any commonalities we see have to be taken with a grain of salt.
Yet, if we see the same patterns come up enough, we can also fall for the cluster bias. If we’ve seen the same head-and-shoulders chart for the same stock four times this month, we’re inclined to think we can keep playing it the same way…
Until we can’t.
Someone who understands fundamental analysis as well as technical indicators may think they have a pretty good hold on things. They may, for a while, win more than they lose. Day trading is a stressful job and, unless you have a big bankroll to begin with, won’t provide you with much income for a long time.
Survivorship bias leads people to believe trading is a good way to make money. Steve Jobs and Bill Gates both dropped out of college, but a diploma isn’t going to stop you from starting a successful software business. As inspiring as Horatio Alger stories may be, phenomenal success is rare — even among bright and hardworking people. Not to mention that the most talked-about billionaires today didn’t exactly rise out of abject poverty…
The Mac Daddy of them all is the confirmation bias. The markets are indifferent to us. We only have access to our limited understanding of the world — our own feelings and intentions. No one is born a trader. Those with the right aptitudes and mentality are rare, so there is a need for an alternative — something that combines the reliability of a savings account with the rewards of a good stock, held together with a next-generation tokenomics that only blockchain technology can provide.
“People always tell me, you should have your money working for you. I’ve decided I’ll do the work. I’m gonna let the money relax.”
HODLC wants to give you and your savings a vacation. We want to see people have the time and money to do what they really love — to excel while empowering themselves and others at the same time. HODLC has a vision of a world where no one needs to lose for someone else to gain. If you truly love trading, that’s great. HODLC can be the cornerstone of your portfolio, the foundation of your future.