Trading
Finding good trading setups helps to trade with a plan — not just a hope that a stock will go up. It’s the difference between being a well-prepared trader and a gambler.
Types of Trading?
DFI offers two types of trading to its community: a) Managed Trading Account - attractive for the investors with some trading experience and with a profit/risk capability in mind for higher earns. b) Trading & Liquidity Pool - backed with the capital to issue a guarantee promise by the managing entity and very interesting for conservative, and less risk-oriented investors. c) DAO Token - every entity of DFI issues DAO Governance Tokens as a proof for the submitted underlying capital into DAO treasury. This capital is being used among other things also for the trading activities and liquidity pool buildings, therefor the investor participates at 100%.
Trading & Liquidity Pool
A liquidity pool serves the same purpose as market makers, but they do away with the centralized hierarchy of traditional finance. Instead of relying on third parties, decentralized exchanges (DEXs) allow anyone to “pool” their crypto onto a platform to facilitate trades.
Trading pool - two or more investors who manipulate a market price by making buy or sell orders so as to create the impression of high volume and general interest in the market. This could raise or lower the price, according to the needs of the trading pool. A trading pool is a private investment structure that combines investor contributions to trade the futures and spot markets. The trading pool, or fund, is used as a single entity to gain leverage in trading, in the hopes of maximizing profit potential. Trading pools are also called "managed futures funds."
What is Swing trading?
Swing trading is a style of trading that attempts to capture short- to medium-term gains in a stock (or any financial instrument) over a period of a few days to several weeks. Swing trading primarily use technical analysis to look for trading opportunities, utilize fundamental analysis in addition to analysing price trends and patterns.
What is Intraday trading?
Intraday means "within the day." In the financial world, the term is shorthand used to describe securities that trade on the markets during regular business hours. Intraday also signifies the highs and lows that the asset crossed throughout the day. Intraday price movements are particularly significant to short-term traders looking to make multiple trades over the course of a single trading session.
Risk/Reward Ratio
DAO Finance assess trades on a risk/reward basis. By analysing the chart of an asset, determines where to enter, where to place a stop-loss order, and then anticipate where to get out with a profit. If they are risking $1 per share on a setup that could reasonably produce a $3 gain, that is a favourable risk/reward ratio. On the other hand, risking $1 only to make $0.75 isn’t quite as favourable. To calculate the risk-reward ratio, you need to divide the amount you stand to lose if your investment does not perform as expected (the risk) by the amount you stand to gain if it does (the reward). DAO Finance use the following ratios:
Aggressive (1:2), risky
Moderate (1:3)
Balanced (1:4)
Safe (1:5)
Trading primarily use technical analysis, due to the short-term nature of the trades. That said, fundamental analysis can be used to enhance the analysis. For example, if a trade sees a bullish setup in a stock, it may want to verify that the fundamentals of the asset look favourable or are improving.
Summary
Discovering the ideal balance between technical analysis, risk management, and market timing is the key to mastering swing trading and achieving consistent success in crypto markets.
What are managed trading accounts?
A managed crypto account is a type of currency trading account in which a professional money manager makes trades and transactions on a client's behalf for a fee.
Individual investors who are not experts in crypto currencies but still want exposure to this asset class may consider a managed crypto account. Managed crypto accounts are also often chosen as sub-advised funds for money managers who want a currencies component to their portfolio but who do not specialize in crypto exchange trading.
A managed crypto account consists of putting money in a crypto account and having a professional trade those funds in the highly leveraged crypto exchange markets.
Managed crypto accounts offer exposure to an asset class much different than stocks or bonds.
Managed crypto accounts are high-risk, high-reward investments. Both individual investors and professional managers who aren't crypto experts can make use of managed crypto accounts.
DAO Finance do charge high fees: often between 20% and 35% of a trade's earnings.
Managed crypto accounts are an investment opportunity for those who want the potential of returns from leveraged crypto trading, are willing to take serious risks, and want to have professionals do the work of selection and trading. It consists of putting money in a crypto account and having a professional trade those funds in the highly leveraged crypto exchange markets.
Investors who opt for this sort of account have the hope and expectations of unusually large gains with the understanding that they could experience severe losses.
How does account management work?
When you open a managed crypto trading account, an account manager (a team of traders) will trade your capital alongside other investors' capital, buying and selling currencies. Manager has discretionary power over the funds: that is, he makes the decisions and don't consult you before a trade. There is usually only the charge of a performance fee, so you only pay when a profit has been made.
Account fees
Performance fees are cost structures that align the interests of account managers with those of their clients or investors. Unlike fixed management fees, PFs are calculated based on the trading performance of the asset manager. This means that the fee depends on the performance of each trade.
Management fees cover expenses involved with managing a portfolio, such as fund operations and administrative costs. The management fee varies but usually ranges between 0.20 - 2.00%, depending on factors such as management style and size of the investment.
Trading Profit
While DFI account managers work with the funds, the resulting profits are distributed among investors as follows:
Daily statistics are kept. The results of completed trades always count.
Investor participates in the results in the amount of the capital invested within the contract term (Trade-Order).
Positive results are also used in trading, which leads to higher profits.
It is important to emphasize that the profit is proportional to the risk and is borne by the investor.
Launch into better trading
5 strategic steps to help boost you from trader to savvy trader—educated, informed, and confident:
Found your trading account
Create your trading strategy
Trade & monitor
Monitor
Monitoring and observability tools provide real-time feedback on each system component’s fitness, performance and interoperability, rapidly spotting and addressing irregularities and other urgent issues.
Performance monitoring analyses system metrics, such as trade execution time, order fill rate, slippage and latency. It helps identify bottlenecks or inefficiencies impacting the system's overall performance.
Constantly monitoring the system infrastructure, including servers, network connectivity, data feeds and platforms, helps ensure the system is always available, minimizing downtime and potential losses.
DFI provides a monitoring tool for better, transparent user experience. Built on chain data all trading and liquidity mining activities can be seen in real time by everyone.
Invoice
After each period of trading an invoice will be issued transparently to deduct the corresponding commission from the trading profit. The management fee is deducted before the trading order is executed.
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