Online trading is booming - according to data analyzed by Cerulli Associates, online trading activity has “increased dramatically” in the first quarter of 2020 compared with 2019. Trading apps and platforms like eToro and Robinhood are also enjoying exponential growth. However, despite its rising popularity, it still remains a mysterious black box for the average investor. According to Statista, merely 10% of traders today do not lose money and just 3.5% to 4.5% of day traders become successful over time. The causes for this reality are manifold - from lack of experience to a considerable discrepancies in the technology available to the small and big market players. A new blockchain project has come up with a solution that might just prove to be exactly what traders need.
Trading online has become easily accessible to almost everyone with many restrictions such as required accreditation falling out of the picture and the advancements in digitization. Today, you can sign up and start investing from your phone in the matter of minutes. However, this does not mean that the ease of access translates to good returns - on the contrary, traders are finding it more and more difficult to make money. Even during the recent times of many stocks going through the roof, most traders are actually still failing in turning a profit (CBNC).
It is only natural to question why this is happening and what the exact reasons are. Let us explore some of the probable and possible causes for the abnormally low traders’ profitability.
Lack of knowledge and experience
With many people entering the fray of online trading, most of the newcomers have little to no knowledge what it actually takes to be a profitable trader. While many believe that investing in cryptocurrencies is a gamble, there are other factors involved, and the inherent volatility of the market is exactly what makes it so tricky to become a successful cryptocurrency trader.
Taking a look at the possible options for trading education, it is no surprise that people have limited knowledge even about the basics of investing. The phenomenon of drowning in information while still lacking knowledge is as prevalent as it gets in the context of trading - sources and educational materials are fragmented, have different requirements and largely depend on the profile of the respective investor. You cannot assume that a risk averse and a risk tolerant investor should both be taught the same way about how to approach building their portfolio for example. There are also multiple trading and investing courses available online promoted via Facebook ads that have questionable results, some of which are downright scams, fishing for thousands of dollars from the beginner traders, only to give them information that is already available for free.
Disbalance in the tech and tools available
The harsh reality today is that the average trader has to compete against the worst odds he could possibly encounter. Big investment firms and hedge funds have access to sophisticated software solutions that are capable of analyzing millions of data entries at any given second, process that information and deliver it to their traders in the form of signals and investment suggestions. The capabilities of such programs go way beyond the ability of humans and are only available to a fraction of the market players, who also happen to be the biggest market movers.
Dohrnii is a financial empowerment ecosystem aimed at providing a comprehensive set of tools, knowledge and resources to cryptocurrency traders, allowing them to become consistently profitable in the long term. Created by the Dohrnii Foundation, a non-profit organization based in Switzerland, the project’s mission is to democratize advanced trading technology and to offer the chance for the average trader to have the same baseline conditions as experienced investment firms and hedge funds.
One of the core features of Dohrnii is the trading academy, which was specifically created to educate cryptocurrency traders based on their past experience, risk profile, trading budget and many other variables that influence their portfolio. In an interactive onboarding process, the trader answers a variety of questions that test his knowledge and profile. Based on the results, the traders then get personalized lessons and resources that help them improve their bottom line performance. Furthermore, the actions and results of the trader are continuously analyzed by Dohrnii, allowing the platform to spot potential improvement points and give tailored suggestions to every trader.
On the back end, Dohrnii combines a complex set of interrelated AI algorithms that work in conjunction with each other. The information gathered from multiple sources is processed and analyzed by the platform and then delivered to the traders through the interface in the form of suggestions by the Robo advisor and through the information module. The Robo advisor, which is an AI in itself, adjusts to each specific portfolio and risk profile and suggests potential actions that are in the interest of the user. Traders can also set automated trade orders that are executed immediately through a third party exchange when a certain criteria set by them is met, allowing them to tap into an opportunity just as it presents itself, minimizing slippage and maximizing profits.
The full-fledged trading insight platform will be available on both mobile and web in 2022. If you are interested in learning more about the Dohrnii project, their mission and future plans, visit https://dohrnii.io/en