Beating the House Odds
Beating the House Odds
There's a reason that 95% of day traders blow up their account, and it's because the odds are stacked against them. Today, I help quantify the 'HODLers advantage' and how to think about choppy markets
G’day Folks,
Today I want to explore a topic that has been on my to-do list for some time, and that is a proper study of this meme.
Instinctively, I’ve always felt that the proportion of time where Bitcoins price does absolutely nothing would surprise us. The question was how best to quantify it?
What I found was extremely insightful, and it helped me rationalise a range of market anecdotes that I am sure you have all come across:
Why time in the market (HODLers) beats timing the market (traders).
Why most day-traders (95%+) blow up their accounts.
What happens if you miss the best 10-days, or avoid the 10-worst days.
As investors, we spend a lot of our emotional capital looking at, thinking about, and responding to the daily price chart. However, the odds may not be stacked in our favour at this time-frame.
In this piece, I want to demonstrate the advantage of the average HODLer detaching their emotions their from the daily noise, and instead focusing their strategy in a way which help us beat the odds.
📈 Reminder: you can find the charts from our articles on the Checkonchain Charting Website, and a guide in our Charts Tutorial Video.
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