Nov 2021#Cryptocurrency

A Day in the Life of a Trader:An In-depth Study of Crypto Traders from Four Parts of the World

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Contents

  1. Key Insights
  2. About the Research: Context, Purpose, and Methods
  3. Results
  4. Conclusions

Key Insights

  1. The participant’s country is not the determining factor for the daily routine. To a large extent, the differences in routine are correlated with experience in crypto trading.
  2. Expert respondents strive to participate no more than 2-3 times in crypto trading, and newbie respondents try to pursue any opportunity, and therefore they also participate more intensively in trading.
  3. The passion for crypto trading brings a personal transformation: beginners chase quick profits, while experienced traders strive to ensure predictability. Experience in crypto trading also shifts the focus from profitability to risk control.
  4. Both external (providing analytics, advice from the community and friends, and market stability) and internal (a flexible mind and stress-tolerance) factors aid the trading decision making process. 
  5. Both groups of respondents highlighted information security as an important element in trading. The respondents use both simple precautions and specialized solutions to protect keys and access. Selection criteria for crypto traders are largely related to the public evaluation of applications, security certificates, and technologies used.

About the Research

The study attempts to change the well-established narrative about crypto trading being a destructive practice by describing the lifestyle of different experienced traders from several big crypto clusters around the globe. 

Additionally, better knowledge of their thinking and lifestyle will help crypto companies create better products and engage more traders.

In the media, the topic of crypto trading often carries a negative connotation. The public is rather skeptical about crypto trading, sometimes comparing it to gambling and other stigmas. It provides lasting damage to the whole industry: it is harder for the projects to raise funding, it is harder for users to join the projects because of the mistrust, as a result, the market progresses slower than it can because of the unfounded fear.

Context

Market volume during 5 years

  1. Drastic market volume increase attracted a large number of people to participate in trading. During its short history, the crypto market has offered various ways of raising funds (ICO, IEO, IDO). During the boom, a significant part of such campaigns ended unsuccessfully due to the fact that some of the projects that were looking for funding were scams (OneCoin, BitConnect, Compound finance, KuCoin). These issues damaged the reputation of the market. Many projects now struggle to raise funding.
  2. Government agencies that keep an eye on crypto try to enact stricter measures on the industry (British Financial Conduct Authority bans trades with crypto, SEC: crypto is a financial wild west, China’s ban on crypto).
  3. Bad experiences are often more visible: media coverage of dramatic stories of investors and traders who got burned in the market is quite common, allowing associating crypto trading with negative views (1, 2, 3, 4, 5).
  4. A 2018 research shows the bitcoin traders share irrational optimism over easy wealth.
  5. Finnish cross-sectional population survey in 2020 research on representative sample 1530 people shows: crypto trading is connected with higher stress.
  6. A 2021 research paper on a sample of 543 people concluded: gambling predisposition significantly increases the intensity of crypto trading.

Our study suggests taking a look at crypto traders' everyday life and rethinking the negative effects of crypto trading on their lifestyles.

Methods and Sampling

The study was carried out using a qualitative methodology. In-depth interviewing was the chosen mode of information collection.

The sample design was constructed among several dynamic crypto clusters around the globe (5 participants for every cluster): 

  • the Post-Soviet region (Russia and Belarus), males, 27-35 y.o., 2 of 5 are professional traders *.
  • USA, males, 26- 30 y.o., non-professional traders .
  • Nigeria, males, 20-30 y.o., 1 is professional trader *.
  • Southeast Asia (Singapore and Indonesia), males, females, 22-27 y.o., 1 is professional trader .

professional traders — people who have a paid full-time job as a trader.

non-professional traders — People who do not have (or have a different job than) a paid full-time job as a trader.

20 respondents total.

For each cluster, we collected representatives for low, mid and top experienced traders. We gathered quantitative data via an online questionnaire on a number of background questions. The experience level was assigned using the information on how long the trader was trading in the crypto-market — the number of deals per day averaged.

Purpose

The goal of this study is to focus on what place crypto trading takes among different experienced traders and find out how it affects their lifestyle.

Results

I. Maturity: Thinking of Experts VS. Thinking of Newbies

The key theme passing through most interviews and allowing stories to be grouped is what might be called expert maturity. 

How to become an expert? Here is a pattern of “developing an expert” process that stands out based on communication with respondents

  • You just know the basics like how to buy and sell but beware of overwhelming yourself with information.
  • You may find that somehow that background information (for example news) is used for making decisions on the market and also analytics. The thing you should worry about is not getting stuck on one particular analytical method.
  • You’re able to conduct a wide range of analyses and you are always trying to fit and balance the market, your only problem is that you are always trying to reach unreachable results.
  • You already know that markets can be different based on the methods used - you know their limitations (maybe you already have favorites). The only thing that you always keep control of is the risk you’re able to take.

Expert maturity is the prioritization of risk reduction and predictability of the trading strategies.

The predictability of the actions and interventions on the market is the most valuable thing about “being successful”. For such traders the “luck” is equal to an “anomaly”:

  • «There is no luck at all. Any anomalies in trading results take the reliability of a trading strategy on the challenge - this is a reason to study your model in more detail and draw conclusions. If someone is "lucky" - it indicates the absence of a structured trading strategy, about "intuitive trading".» (Russia)
  • «[What is luck?] It's a lot of good analysis» (Nigeria)

Predictivity is achieved through the application of  analytical methods and it can be done in a variety of ways: 

  • «Viewing assets according to their own previously formed criteria: correlation matrices, technical analysis, news analysis (rating agencies, social networks of projects).» (Russia)
  • «…my analysis is no longer based on the current market situation, but an analysis of the reliability of the projects themselves that issue cryptocurrencies. More fundamental analysis interests me.» (Russia)

For an expert - the emotional aspect is a distractor. Any emotions as positive as negative ones are undesirable. Even if participants experience some emotion, they trying to prevent it:

  • «It used to be like that, but now it's gone. There is a clear strategy.» (Russia)
  • «I can say I'm always neutral. I don't maybe have personal emotions towards it, but I am always happy if the market aligns with my predictions or maybe everything is good in the market. And the opposite is true, I get sad when things go sideways.» (Nigeria)

The most important thing when trading differs between experts and beginners. We’ve looked at the most frequent words spoken during interviews to get a clear view.

Wordmap gathered from the newbie sample
Wordmap gathered from the pro sample

The vocabulary analysis raises these points:

  • Experts and newbies lay emphasis on different things: the newbies focus on profitability while experts emphasize market research.
  • Experts have a richer vocabulary when compared to newbies (more specific words, terminologies).

Based on this information we can say that the difference is much more than skills; priorities matter as well. As one advances to the expert level, the focus shifts from making quick money to giving the market a proper evaluation and making self-estimation of risks. That’s when it starts to sound in a more expert way as the following data shows. Let’s get closer to the details.

The statements on the information fulfilment and sufficiency indicated a situation that experienced traders were less sure on the sufficiency of information they get about crypto than traders with less experience:

Less-experienced traders:

  • «[Do you think that you get full information?] Yeah I think so.» (USA)
  • «I’m satisfied with my sources.» (Nigeria)

Experienced traders:

  • «It is impossible to know everything.» (Russia)
  • «Complete information is almost never available. You must always look deeper. The news feed is purely for understanding the situation.» (Russia)

Such uncertainty doesn’t have anything in common with the FOMO. Therefore, if we continue our process of getting information, we see that more experienced respondents state that information is totally limited, there’s no way of getting the full information on something on the  market and not all information is relevant even if it looks that way:

  • «It doesn't make sense to constantly monitor the fund. There is a lot of information noise. The information is limited, it makes sense to study in more detail only individual coins of interest (and to study analytical information).» (Russia)

The most relevant information is (1) analytical reports, (2) rating agency reports, (3) fund reports. They’re most relevant and valid because they can be proven. 

The less relevant information comes from popular channels in social media. The reason for this is that it can be just promo-material or add. They can be helpful sometimes also – if you want to see how they are trying to reach their audience, but it is not reliable enough to make a strong decision.

All these facts suggest that expert maturity is about shifts in personal attitudes due to the dynamic context of trading. In other words, crypto trading drove personal growth. 

Section Conclusion:

The “expert—non-expert” differentiation is more important than geographical characteristics.

Expert maturity is something that is similar regardless of the geographic factor. It allows for discussions about internal changes in attitudes and practices shared with respect to crypto trading.

In interviews structured around the variable of traders' experience, a number of stories were aligned in their consistency with the thoughts and practices respondents share. Presumably, this consistency refers to the increasing involvement and time spent in crypto trading in the process of personal transformation.

The discussion around this phenomenon’s definition will allow one to argue about the negative impact of the context of crypto trading on people's lives and their propensity to gambling. Expert maturity, on the contrary, that is caused by crypto trading is the reflection of personal growth.

II. Typical Schedule

Although not every participant has a full-time job, time slots are generally distributed around one to three big-time blocks that can be associated with a job or other activity that mainly takes place during the day. 

Though no geographic differences could be found, experience in crypto trading influences the day’s cycle. General differences in activities are presented in the table:

Time

Experts

Newbie

Morning

The day starts: from 6 to 8 am.The day starts: from 6 to 8 am.

Checking the news: yes

«Sometimes I read crypto and blockchain news.» (USA)

«Browsing or reading articles, mostly about Crypto» (Nigeria)

Checking the news: yes

«With this, [reading the news] I would say the morning begins.» (Belarus)

«I'm reading some news» (Nigeria)

Making trades: not always (!)

«I start my trading later» (USA)

«I can set up some algorithms at that time» (Russia)

Making trades: yes

1st half of work

(3-4 hours)

Checking the news: yesChecking the news: yes

Making trades: not much (!)

«I always have a specific time for news at work» (Nigeria)

Several transactions are being made.

«I do, but a little» (USA)

The main focus is on work.

Making trades: yes

Reported difficulties with concentrating on work

«It can be distracting» (USA)

Daybreak

(45 min to 1 hour)

Checking the news: not much

«I don't do anything else during lunch, just relaxing.» (Indonesia)

«I try to reply to SMS if any. If not, watch something on YouTube, literally 5-10 minutes» (Russia)

Checking the news: yes
Making trades: not at the daybreak (!)

Making trades: yes

«If I see an explicit setup» (Belarus)

«That's my time of trading» (USA)

«Usually, I'm trading» (USA)

2nd half of work

(4-5 hours)

Checking the news: yes

Checking the news: yes, with additional attention

«Yes. There is different news. The kind of information I get in the morning might be different from what you see in the evening» (Nigeria)

«Depends on what I see in the market - what kind of news background affects the behavior of some inadequate in the market among traders» (Belarus)

Making trades: yes

Making trades: yes

«Concentrate on trading» (USA)

Evening

Making trades: no

Making trades: not much

«Yes, If I see something coming – I won't sleep, I will continue watching my portfolio.» (USA)

«Yes, I'll make some trades.» (USA)

«Well, I don't. I need to check them out in the morning when I wake up» (Asia)


 

 


 The conclusion of this comparison is that experts prefer to concentrate their attention on work (or another full-time activity) and opposite to them not yet experienced traders try to use every possibility to trade

In other words, beginners read news on crypto during the whole day. Contrastingly, experienced traders read crypto news in the morning and at the end of the working day.

Moreover, experts mainly tend to dedicate only a predefined time at the second half of a working day for trading.

Let’s look at some details of the daytime activities. The significant part of the first thoughts of the day is the planning of these activities:

  • «I try not to start my morning with an iPhone and somehow wake up physically more - walk around the apartment, take a shower, drink tea and only then just watch» (Belarus)
  • «The first thing that I think of is my plans for work» (Nigeria)

But being able to work is not so simple. The participants do a number of activities to start their day. Discussing this topic indicated that the morning routine mostly is about "getting on the right track" and becoming well prepared for the day's hard work. They achieve this by soft waking up (when you stay in bed, and not getting up immediately), then moving activities and finally - the breakfast:

  • And I've completed the main tasks which are meditation and exercise.» (Nigeria)
  • «When I wake fresh» (USA)
  • «And depending on things that will follow, maybe after maybe taking breakfast, what I'm supposed to do next and how my day is supposed to carry on.» (USA)
  • «[The morning only good…] When I wake fresh» (USA)
  • «Cool head, workout to warm up the body, light breakfast» (Russia)
  • «After waking up the first thing that comes to my mind is just motivating myself, and that day will be good, and I'll be successful. Yeah, I think that's it» (Indonesia)

But some of the respondents (non-professionals) are ready to trade just after waking up:

  • «After waking up I go for my morning run, take a shower, then breakfast, then start to trade. When I wake up healthy and everything is positive. The Crypto prices are rising - that's a good morning» (Nigeria)

Highly Surprising Finding: Crypto Traders Eat the Same Food as Ordinary People!
Although traders deal with SushiSwap and PancakeSwap, their food is commonly standard. For example, these are some meals that our research participants named:

Breakfast — mostly something light:

  • «I am a vegetarian - I make myself porridge or make myself some sandwiches.» (Belarus)
  • «milk, 2 or 1 egg» (USA)
  • «Coffee» (Nigeria)
  • «Milk and pancakes» (Indone

Lunch — more complex food (but not always):

  • «Sometimes I eat some bunnies and sometimes fish.» (Indonesia)
  • «Noodles, some fast food» (Nigeria)

Dinner — the most complex food:

  • «I am a vegetarian so a lot of vegetables» (Belarus)
  • «Chicken, beef, rice, vegetables» (USA)
  • «Spaghetti, pork» (Indonesia)

For the rest of the day, it is normal to have some snacks but nothing as heavy as dinner.

Maybe, a good dinner prepares crypto traders for more profitable trades! But who knows?..

In the morning period deals were rarely made.

Checking the news on crypto is one of the most common things that respondents do in the morning. The reasons for that is to:

  • Check up on new trends. 
  • Set the direction of further research on some projects. 
  • Be ready to join the event/join the market at the “best time”. 

The sources that traders do use, 

  • Twitter (projects and communities). 
  • Telegram (blogs and channels dedicated to trading and investing). 
  • Youtube (blogs and thematic channels, reviews). 
  • Funds (for example, Binance). 
  • Project websites. 
  • Special websites (Agencies, Analytical services e.t.c.). 

Right after that, some traders conduct a couple of trades and prepare for work.

Getting concentrated on work is something that can be challenging sometimes, but most of it depends on what has been done the day before: 

  • «If you get enough sleep and there is no rush in your plans, then there will be no problems with the fight either» (Russia, professional trader)
  • «Sometimes it is very simple and depends on the workload that may be available this morning» (Nigeria, software engineer)

Not all the participants of the study have crypto trading as their paid full-time job. But the overall style of work time between participants is generally the same. All that is important is to be in contact with colleagues and to get interesting tasks. The approach to solving problems at work among the research participants is significantly similar - almost all respondents indicated that they prefer to solve basic tasks (usually more complex) and current tasks on a smaller scale.

How Does a Typical Trading Session Look Like? Up to 30 Minutes of Hard Thinking…

By the time of work, the trading session can take place. 

The whole session goes into research, providing analytics (appr. 80% of time and effort) and making a deal (20%). 

Overall it takes from 10 to 30 minutes to conduct the deal from start to finish:

  • «In general, the session lasts about half an hour - of which the most part is occupied by research, checking the data according to statistical criteria. The main thing is to correctly identify the trend and correctly assess the risks. Passing the pool of criteria allows you to form a decision on the deal. The transaction itself is completed in a minute.» (Russia)
     
  • «Entering the terminal, viewing coins, searching for an entry point, studying news sources, placing orders or buying at the current price» (Belarus)

To prevent burnout most of the participants who have a full-time job take a break from work. The whole duration of all breaks is about 1 to 2 hours. Every one of those breaks is about 7 to 10 minutes long. But the biggest one is for lunchtime. The study participants also stated that during lunch they did not prefer to do anything other than a subject activity.

  • «I try not to consume information at the same time with food. It happens that I can watch a video that I have planned.» (Belarus)
  • «I don't do anything else during lunch, just relaxing.» (Indonesia)

By the end of the workday (about from 18 to 20), it is normal to feel tired but none of the respondents noted the urgent need to switch from work tasks to anything else.

Most of the deals could be made by this time because of the end of the day. If it was algorithmic trade – then traders can check the day’s results. If it is manual trading – then traders can check their portfolio, provide an analysis on the actual balance and make a rebalancing if it is needed. The most mentioned type of analysis during the interviews – technical analysis. The news is mainly used for background understanding of the project. 

The main reasons for trading been stated as reaching financial independence, making big purchases, self-development:

  • «I would like to at least know this more and more, at least to understand every bit.» (Belarus)
  • «Buying a house» (USA)
  • «Financial freedom, capital increase, involvement in the formation of the future economy» (Nigeria)
  • «I would like to be financially independent despite the economic recession in my country» (Nigeria)
  • «Being a full-time trader. Yes, and maybe it's not the goal, maybe a dream just. Come up with my own exchange.» (Indonesia)

Participants also highlighted the need for something that could facilitate their trade and decision-making.

Crypto Trading is widely known for its possibility to be active 24/7. Respondents stated that they’re getting enough sleep for their needs. 

  • «Yes, if I follow my own rules - I don’t eat enough at night, I don’t load any important information into my brain; if the apartment is warm enough, if I drink a glass of water before going to bed, then my sleep will noticeably improve» (Russia)
  • «I don't think I'm getting enough sleep during the weeks, but I do get enough sleep on the weekends» (Indonesia)

However, the real issue for the number of participants was to make yourself stop trading. While experts stated that as a potential problem, newbies experienced that themselves:

  • «I don't even try to open the terminal at night, so as not to get stressed.» (USA)

The appropriate time for sleep is 6-7 hours, according to survey participants. Although some of the participants said that they search for crypto news just before bedtime – most of the research audience stated that this is a negative practice because it can captivate so much that:

  • «You can lose sleep all night because of this» (Belarus)

Section Conclusion 

Work is the center of all daytime activity. Trades and news checking have their place during the day if the schedule permits. The intensity is different due to the traders’ experience. We’ve compared two respondents’ groups and discovered that experts prefer more structured and focused days with a couple (two to three) sessions, and non-experience prefer to be trading as much as possible. No evidence of differences based on the factor of GEO were found.

The traders try not to get burned out and save their relaxation time by limiting their trading actions before bed.

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