The digital currency market dozens of times more than the stock market trading volume, the inspiration for me.

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1. Financial markets gradually amplified trading volume

In the last century, benefiting from the development of Internet technology, stock trading began to shift from telephone trading to Internet trading. It was predicted that trading over the Internet would be more convenient than over the phone, so people would trade more aggressively, faster, and make more money.

In response to the above speculation, there was really a study (Online Investors: Do the Slow Die First?), and the results of the study were disappointing: through the Internet trading, people trading is to become more active, more speculative, but the profit is reduced by about 3%.

Now the cryptocurrency world is much more convenient to trade on, with thousands of exchanges, large and small, around the world 24 hours a day, making it a true day-to-day trading market. How will the trading volume change? Let's take Apple, BTC, and EOS as examples to compare.

Taking the turnover rate as a comparison, Bitcoin is 5.4 times that of Apple's stock, and EOS is 58 times that of Apple's stock, and that's just the bear market data. It can be predicted that when the market capitalization of virtual currencies gradually rises and the number of people entering gradually increases, the trading volume and trading ratio will be much higher than the stock market.

2. Why such a high trading ratio

The usual explanation for such a high trading ratio for virtual currencies is that the thousands of digital currency exchanges around the world, with their 24/7 trading markets, make up a true day-to-day trading network. The stock market trading time is usually 4 hours, holidays also rest, the light of the daily trading time is the traditional stock market 6 times. Secondly, most of the major exchanges, most of the brush volume behavior, but also pushed up the digital currency trading volume.

In addition to the specificity of the digital currency market itself, it is also related to the people in the digital currency market. One of the most common cognitive biases in humans is overconfidence, and in a short-term trading market, overconfidence will greatly increase the frequency of people trading. There are several reasons that cause people to be overconfident in the trading market:

1. A large amount of available information.

2. The choices they have already made.

3. Proficiency in operational tasks.

4. Misinterpretation of the sequence before and after as a result.

5. One's past successes.

3. The lessons we have learned

We already know the mirror world, the world of the long-term fixed investor is to choose quality assets, invest regularly and for a long time.

On the other side of the world, over the long term, information is getting better, transaction costs are getting lower, trading is getting easier, and people are trading more. The consequent result is a relative reduction in the profits gained.

And fixed investment can develop our long-term thinking, to avoid falling into the pit of frequent trading. About how to fixed investment, you can private message me. I'm Ox who wants to stick with you in fixed investment for 7 years.