To commemorate the 2nd anniversary of TAOTAO's launch on May 30, 2019, a special program "A Year of Turmoil" was held on YouTube's virtual currency (cryptocurrency) and blockchain comprehensive program "#ConnecTV", crypto asset trading How do staff work? ” was recorded and broadcasted.
CoinPost representative of the mirror and Taotao representative Kaiichiro Arakawa (at the time of recording on June 8, 2021) talked about the turbulent year according to TAOTAO's FY20 transaction data analysis, please take a look.
# ConnecTV special project "How can crypto-asset traders navigate a turbulent year? ”here
If you cannot Watch the video from, we have prepared a summary below, so please read it.
* * *Everything This time, to commemorate the 2nd anniversary of the establishment of the crypto asset exchange TAOTAO, Mr. Kaiichiro Arakawa, Representative Director (While recording) visited us
.
How is a cryptocurrency (cryptocurrency) trader called "How is it acting in a turbulent year?" ”, you brought the actual data.
Arakawa
TAOTAO I think it’s all thanks to everyone who made it this far on the 2nd anniversary of TAOTAO’s opening. With gratitude We will explain it based on our clients' trading performance data. We hope you find it useful in your trading.
Today, I would like to tell you the following three points.
[1] In In a turbulent year, how do crypto-asset (virtual currency) traders act?
[2] Where is the "tide" in the market?
[3] What will TAOTAO do in the future?
 
 

In a turbulent year, how do cryptoasset (cryptocurrency) traders act?

First, I want to talk about [1].
On the first anniversary, we analyzed the trading data of FY19 and made the following report.
In trading, "how to control losses is the decisive factor in the game" and "total profit change depends on it" The analysis has been talked about on Twitter etc.
This time I would like to report on FY20.
The data to be aggregated as a prerequisite for this time is below.
  ;
First of all, in order to understand the data after this, I will tell you the transaction size of our company.
In FY2019, the volume of leveraged trading exceeded $500 billion, but in FY20, it totaled more than 10,000 $100 million. However, there is such a big swing every month. This is affected by the trading of some large customers. It feels like there are many "savvy investors" who often look at spread-centric setpoints.
 < br>In terms of the number of trading accounts, there were 2,724 accounts in FY20, unfortunately 60% less than in FY19.
When many clients stopped trading after the market crash in March 2020, and leveraged trading was affected by financial instruments in May 2020 and trading laws, we became a first-class financial instrument operator. We believe the reason is that we were unable to provide leveraged trading services to newly registered customers due to our failure to register in time.
I hope you are assuming that the data is in this state If so, ask us.
 
Let's take a look at the percentage of accounts that are profitable in leveraged trading, so to speak "Equity".
 
Kakami
This is a data worthy of investors' attention.
Arakawa
The market price has skyrocketed from the second half of 2020, but unfortunately our client's profitable account (win rate ) did not increase significantly, just over 20%. Even though there was a decrease in the number of transactions due to the above reasons. We regret that we could have To do more, because we can't increase our client's win rate while the market is going up.
Surprisingly
The percentage of those who profited did not easily increase despite the rise in market prices.
Arakawa
One thing to note is that this is the "win rate" that TAOTAO can see, so it is possible that we are hedging transactions on other exchanges. From this point of view, it is possible It doesn't look the same.
How much do cryptocurrency traders get? Did you lose it?
Arakawa
From left to right, from the least profitable account to the most profitable account.
The accumulated 77% points are exactly 0 profit and loss. The left side is the losing account group, and the right side is the profitable account group.
Unfortunately, most people are losing money, but in terms of money, the median "winning account" is the median losing account, which is a bit more expensive. Some people are making money
.
Is there a so-called "billionaire"?
Arakawa
There are 15 accounts with over $100 million in profits. A little yearning (laughs)
As I mentioned before, our transaction data is heavily influenced by some big clients. To make these numbers more familiar to many of you, let's take a closer look, excluding the top 1% and bottom 1% profit and loss accounts.

First, a general summary.
The numbers for the aggregated results are slightly different from the graph shown at the beginning of the first anniversary, but this is because of the different number of accounts to exclude. If you look at the comparison between FY19 and FY20, it is obvious, but you can literally take "the tide has changed".
In fiscal year 2019, loss control is important. On the other hand, in FY20, the difference between a winning account and a losing account is the "win rate" and "profit per settlement (profit amount)".

I also prepared the data in chronological order.
On the left is a comparison of profitable (+) and losing (-) accounts for FY19 and FY20, respectively. The orange line is the probability of winning when paying, the white bar is the average winning amount when paying, and the black bar is the average losing amount. As I mentioned before, the aspects of FY19 and FY20 are very different and it's hard to summarize this.
On the right is its quarterly view. If you look at the profit and loss bars on the far right of FY20, you can see that both the profit and loss amounts are large and the bars are long. It can be said that this is the result of the latest market.
For example, in the fourth quarter of fiscal 2020, the winning rate for winning accounts was as high as 70.6%. When you lose, the loss per settlement is large, but the winning rate is high, so that means it becomes positive as a result. On the other hand, the winning rate for losing accounts over the same period was 56.2%. Over 50%, but we can't make more money than we lose. The result is that while market prices are steadily rising, not many can win. The key is how to restrain the loss
. Arakawa yes. While FY2019 winners are universal, as are so-called market quotes, in FY20, beyond that, "how you see the market" may matter. By the way, from a loss control perspective, there is also a way to hedge (loss aversion) with alternative crypto assets. A cryptocurrency alternative is a mechanism for depositing actual BTC or ETH as margin. By setting up a leveraged sale with an alternative crypto asset, you can hedge against short positions and reduce your losses when the price of the crypto asset falls. Here is a summary of how many cryptocurrency alternatives are used in leveraged trading. This will be the chart for FY20. On the left side of the chart, the accounts with high profits and high profits in leveraged trading are divided into 10 equal parts (i.e. each part is a block of 272 accounts), each part uses the proportion of alternative crypto assets (orange dotted line) and crypto Number of currency substitutes (black bars). The higher the ratio to the edge, the higher the transaction volume and the higher the utilization and usage of the alternative crypto asset.

On the right side of the chart only the 1 with the highest profit is extracted % and the lowest 1% of customers who lose. You can see that the usage of crypto assets is very high, and the amount is very large.
Although I don't have a chart, how many clients who have made large losses on leveraged trades trade with our firm, combined with alternative crypto assets and open positions as a hedge. I am trying to find out. When I actually looked at the detailed data, the ratio was not that high. We recognize that we need to understand this as a way to control losses in the future.
Also, Taotao has introduced a negative rate in the leverage fee, so I hope this can also be used as a hedging method.
It is often said that Taotao's trading period is
"people lose the market, stop trading", is this true? At Taotao, 30% of people stop trading the month they start trading, and about 50% vary by month.
This includes saying that our service is not good, so I have to reflect a lot, but in general, as the picture below, the customer's transaction time is 7.62 months.
If you split it into accounts with trades and accounts with losses, the accounts with losses will be longer.
This is contrary to conventional wisdom. Losses can be extended by continuing, which can be severe if a "recover the amount lost" attitude is involved. If you do it calmly and don't get angry, the results may be better
.
You also say that investors who have their own rules are stronger.
Arakawa
FY19 analysis report "How to control trading losses is the key to the game" can be said to be "the golden sentence of the market".
 

Where is the "tide" in the market?

In Arakawa
, market "tide" is an important factor for FY20, but I would like to ask TAOTAO analyst "Virtual NISHI" to explain where it is and how to find its growth.
Prices in all walks of life
fluctuated greatly and the market was big, what was the actual situation?
Judging from the virtual NISHI
chart, the price increase curve will sharpen rapidly starting around the end of October 2020.
By superimposing related news, we can see that just before this, a number of companies including PayPal announced their entry. The price fell for a while in 2021, but at that time, major news such as Tesla's acquisition of BTC followed, which became the factor that pushed up the market price. As expected, I didn't expect it to rise so far.
If you draw a straight line on the chart, it would seem that the timing of the big tide is late November 2020. What happened at this point?  

First, (1) the expected inflation rate (the rate at which people predict a future decline in fiat currencies) has risen. In other words, the expected decline in fiat currencies helps boost cryptocurrencies.
Secondly, (2) Japan, the United States and the European Central Bank are expanding quantitative easing, supplying a large number of fiat currencies such as the US dollar to the market.
Finally, (3) the VIX index (fear index) drops to around 20, the volatility of traditional markets (stocks, foreign exchange, etc.) decreases, and funds entering the virtual currency market are prone to large price fluctuations, and conditions follow the trend.
How did you
reach this milestone?
Virtual West
First of all, ①#"Cryptocurrency Breaking News LIVE" will be explained by me and representatives of various ConnecTV affairs. Next, (2) "crypt index" operated by CoinPost and introduced by Taotao gives suggestions from various angles. Finally, ③ TAOTAO column, to the effect that the opinion of the Bitcoin market may change in October 2020, a column just before the tide, published by email and delivered to customers.
It is necessary to read this information regularly and be sensitive to it.
 

What will Taotao do in the future?

For Taotao, it seems to be a turbulent year and a volatile market price.
Arakawa
The biggest change is that TAOTAO's parent company has changed from the previous Z Corporation to IB Liquidity Market. With the support of the financial specialist group IB Group, we received the long-awaited registration as a first-class financial instrument operator in May 2021.
What does it mean to be a financial instrument trader for Tao Tao
who is already a crypto asset trader?
Arakawa
Simply put, we can offer derivative trading. In this way, we can not only provide leveraged trading services to new customers, but also provide customers with various financial products and services that were not available before, and add new brands.
I think offering board trading, which has been our goal for some time, will also gain momentum.
When
there are more and more products that never existed before. I think there is
Arakawa.
I want to add innovative products and services while competing with other companies. Please give us your wishes for the 3rd anniversary of everything. I think Arakawa
TAOTAO is still a weak crypto exchange. Our vision is to positively impact the crypto asset trading industry, so we would like to consider scaling up to further increase our influence.

We believe our customers and the industry will grow together. We remain committed and we will continue to proactively provide information that we believe will be useful to our customers. Please let us know if you have any questions or comments about our interpretation. I want to value mutual communication with customers.
At the end of each
task, what can you conclude by looking at the data?

Arakawa
: I think the important point is "arming information, identifying trends".
From this analysis, we can again see that the trading styles of the winning account and the losing account are different.
Also, starting in fiscal 2019, I think "controlling entry points and losses" is still important. I think it's important to have your own trading rules, trade on the basis of the rules, and follow the rules mechanically. For this, various trading tools are also used.
TaoTao will also focus on providing useful information to our customers and tell them a lot. This is valuable information
that I don't hear on my usual #ConnecTV.
Thank you very much.
Arakawa
Thank you.