1/ Having built online trading platforms, I can share insights what is happening with #RobinhoodApp, why their businessmodel is shady and how this $GME 🚀🚀🚀squeeze makes this all a pretty messy affair.

So, a thread 👇🏻

2/ Firstly, the well hidden truth of online trading platforms is that most of the active traders lose money. And most does not mean 51%, but this is more like 90-95%. Clients burn out quite quickly as well.

3/ Some research:
a) from Brazil: "97% of traders lose money" https://t.co/DVEfRkyvuS
b) from Taiwan: "Less than 1% of daytraders consistently earn positive returns"

4/ If we take a 100 year stock market chart, one can clearly see that longterm investing makes a lot of sense, whereas active trading most often is not a very rational thing to do. People do it because they think they can be better than the average.

5/ Every online broker should say to their clients "just do long term buy and hold, please-pretty-please do not do any trading stuff." But have you seen messages like that? Me neither.

The reason is that one active trader can bring fees like 500 passive investors.