Module 1Introducon to Degen Trading & High-Risk Markets (In-Depth)
This module sets the foundaonal understanding of degen trading, dening its core characteriscs,
exploring its allure,and contextualizing it within the broader landscape of volale, primarily
cryptocurrency, markets.
1.1 What is Degen Trading?
Denion and Characteriscs (High Risk, High Reward, Speculave):
o
"Degen" (Degenerate):
The term itself is borrowed from gambling slang, implying a willingness to takeextreme, irraonal risks
for potenally massive payouts. It's oen used self-deprecangly by those whoengage in it,
acknowledging the low probability of success but embracing the thrill.
o
High Risk:
This is the dening characterisc. Degen trading involves strategies that expose capital tosignicant
and rapid downside. This includes:
Concentrated Bets:
Oen allocang a large percentage of available capital into a single, highlyvolale asset or trade.
Leverage:
Using borrowed funds to amplify trading posions, leading to disproporonate gains
or losses
relave to the inial capital.
Lack of Diversicaon:
Opposite of tradional invesng, degens typically eschewdiversicaon in favor of concentrated,
high-convicon (or high-hype) plays.
Unproven Assets:
Focusing on new, unveed, and oen unaudited cryptocurrencies or DeFiprotocols.
o
High Reward (Potenal):
The ip side of high risk. When a degen trade "moons" (experiences anastronomical price surge), the
returns can be many mulples of the inial investment in a very shortmeframe. This potenal for
life-changing gains is the primary driver for parcipaon.
