💱Leverage with no liquidations

90% of traders lose 90% of their monies. 80% of the traders quit in the first two years.

There have been several studies that suggest these pessimistic statistics. One of the key issues is the lack of adequate risk management. Furthermore, even when there are risk management techniques deployed such as stop loss, the losses from one bad trade may require many more profitable trades to break even.

How much it takes to make a comeback from loss

Assuming that the trader's skill remains the same, the reality of requiring more trades to make money back exposes traders to consequently more risk of losing money just as much as earning more money. More often than not, a bad trader will lose more than they earn. A vicious cycle can take place. Lose one trade, trade more, lose more.

Eventually, the trader quits trading. This is a common story amongst many new entrants.

Introducing Protected Perpetuals by TaoTrade, a simplified day trading instrument that allows to break this vicious cycle and replace it with a good trading cycle by ensuring that traders do not lose significantly from their trades. Referencing the table, we see that trading on TaoTrade, a trader does not lose significant position and they can keep trading and eventually find profits.

Disclaimer: Protected Perpetuals are not the same as perpetual contracts as popularized by BitMex. For regular perpetuals, trading is on an order book. The funding mechanism is employed to maintain the contract price in line with the underlying reference asset. Funding payments need to be exchanged between buyers and sellers. Traders trade with reference to the bid price and ask price.

When traders trade Protected Perpetuals, they are essentially purchasing options. The payoff is like above, non linear. The downside is capped and limited to the premiums paid up till settlement. The upside is unlimited as though a trader was trading spot. Profits are realized only when settlement is complete. As downside is capped, more leverage can be added. The maximum allowable leverage is 1000x.