What does the trust investment process currently look like in the stock market?
There are a number of brokers and investment banks in global and local markets offering their management products. These are often broad funds and, less frequently, active capital management strategies. Sometimes, offers from private traders can be found, proposing to manage funds for clients.
The problem with the entire trust management market lies in its fragmentation, lack of transparency, and a certain oligopoly of major players who control the distribution of products in the market.
Large brokers and investment companies act as access providers to financial markets for retail and private investors. However, they also control the market of investment products. Moreover, it’s a segregated market where the best products are reserved for premium clients with substantial investment funds. The smaller the investor’s capital, the more generic and lower-yielding product is offered to them.
This is related to the operational expenses for each investor. The bulk of the costs are customer acquisition from the market (marketing and huge payouts to agents). These also include expenses on advertising, office rent, and other expense accounts in the budgets of investment companies and banks. This is why the foundation of their model is to retain commissions from the client for any transactions. The financial outcome for the investor doesn’t concern them much — they need to get their share regardless of the situation. The investor’s profit is merely seen as an occasion to take an additional percentage from the result. Additional, but not primary.
Every investment bank on Wall Street has many “aquariums” where a massive selection of traders takes place, creating “sandboxes” through which thousands of people pass simultaneously. The best are hired and given funds from clients to manage, forming teams for active management investment products. Thus, the market is filtered by major players who hire talented traders for a salary and control a large part of the market through this mechanism.
An ordinary investor is not capable of finding and selecting such a number of traders, nor can they adequately and comprehensively review them.
According to our statistics, less than 0.7% of the total number of traders who consider themselves professionals are able to demonstrate stable profitability of more than 15% per annum, with managed risks over a horizon of more than one year.
In other words, to find one such trader, you have to analyze at least 142. This does not take into account those who are not professionals or not traders at all (but are confident of the opposite — they also need to be filtered out).
This is the reason for another extreme: a large amount of fraud in the trust management market.
Retail investors with limited capital, in search of attractive and profitable products, begin to look for private traders who trade on their own or offer profitable bots for investment. The internet is full of such offers across various platforms and social networks, where they promise a secret formula guaranteeing super-high returns. One needs to transfer a small amount to the trader and wait for the profit. Often, this ends with the loss of capital.
This problem is particularly acute in the cryptocurrency market. The young, poorly regulated market is extremely opaque. An unprofessional investor needs to be able to verify the promises of traders or in any way validate their trading results.
From the first days of developing TradeLink, our mission has been to make the market transparent, fair, and understandable for the novice investor. This is more than just a fancy slogan or a social mission. We see in this a profound practical significance.
In the existing market of trust management, major players control access to the best products, and the average retail investor is not granted access to them. Individual traders are scattered, opaque, and only sometimes honest. Therefore, to create a high-quality and innovative product in this market, it is first necessary to bring order.
This applies to both the cryptocurrency market (especially) and the traditional stock market.
We plan to make the market structured and verified, where traders and investors will be provided equal access to each other in a unified space under clear rules.
It is essential to create a single environment where traders can upload their trading results and showcase them. At the same time, investors can confidently choose the best from around the world and start working with them without the risk of being deceived.
Thus, the TradeLink Passport was created. An analytical platform with a professional social network for traders. A member’s profile consists of their historical trading results obtained in real-time from primary sources — directly from exchange accounts.
Traders have highly valued this opportunity: they now share their public profiles in the public space and add widgets to their websites, providing interested investors with independent verification of their results. There are also competitive mechanics: they compete for the top spots in the overall ranking and participate in trading tournaments.
TradeLink Passport’s long-term goal, is to become the industry standard in trading and active management, where a participant’s public profile confirms their professional level and ensures market recognition. It’s like LinkedIn for traders, where their profile provides detailed analytics of their trading strategies — without the possibility of falsifying or distorting this information.
TradeLink Marketplace gives any investor access to the finest selected strategies. This removes barriers to direct investing between the investor and the trader. There are no middlemen — just clear mechanisms and rules guaranteed by TradeLink.
Traders no longer need to spend huge marketing budgets to attract clients, deal with marketing, or have expense accounts for offices and staff. There’s no need to support each client individually. They can focus on their primary job — trading profitably. TradeLink takes care of the rest.
Investors can now work directly with top traders from all over, where their past results are strictly verified and guaranteed.
The risk of running into a fraudster or a mere amateur is now gone, significantly increasing the chance of earning a steady profit. And investors keep full control of their own funds.
Our critical and principled approach to investment is complete transparency and control. Now, the investor is not only confident in the results and identity of the trader but also always controls his funds since they are on his personal exchange account and trades are executed through API commands. This means that at any moment, the investor can stop copying trades. Neither the platform nor the trader has access to withdraw the investor’s funds.
A key distinction of TradeLink from other copy-trading platforms is its sophisticated multi-following technology.
We advocate for the philosophy of index products. This means risks should be diversified across multiple strategies simultaneously.
It’s good when a strategy is selected from thousands and is among the best. Good, but more is needed. It is much better when an investor begins copying the TOP-20 strategies at once. This achieves incredible levels of stability and profitability ratio.
We consider this to be an entirely new format of operation in the trust management market. That is precisely why TradeLink plans to expand into the traditional stock market in the near future by connecting brokers.
We believe the financial market will undergo significant transformations and change drastically in the next five years. Much like what happened with banks and other financial services when liberal online services of the new generation greatly constrained conservative structures that had existed for hundreds of years.
The future of the financial market is in equal access to opportunities for both traders and investors, with a substantial reduction in the role of intermediaries. The role of crypto exchanges and brokers, investment companies, and banks reduces only to providing technical access to markets. And even that role may diminish in the future.
Fund management will now be possible through a P2P model, where the best managers work with a vast number of retail investors worldwide, not limited by geography or investment size. This is made possible through models like ours, where marketing, transactional, and operational costs for managers are driven down to zero.
On our platform, the role of managers is already filled not only by private traders but also by whole teams and even funds.
TradeLink makes the investment and trading market transparent and honest, ensures equal access, and removes unnecessary expenses. Right now, in crypto. But soon also in the global stock market.
TradeLink: WIN ON winners. We’re making a revolution in the global trust management market. Already today.
Yuriy Avdeev, CEO & CoFounder of TradeLink.pro
