This article is from WeChat public account:Total Sugar (ID: clairetangmedia), author: overall total sugar, cover: Oriental IC

“Wall on the Wall Street” may have been seen by everyone, by the famous guide Martin Scorsese, the handsome coach DiCaprio is good at bursting the table, famous movie about money story.

After hearing about the “Wall of Wall Street” media screening, some film critics pointed to Martin Scorsese’s big nose and smacked him, even taking this shameless movie – this movie Like taking medicine, it is always in a state of madness, and it also shows the wolf that the people of the country relish.

This may have determined many people’s stereotypes about Wall Street financial practitioners. They seem to be smart, greedy, ruthless, and ruined.

Because of Bitcoin, I was the first to study the transaction for the first time two years ago. For the first time, I thought about how to be responsible for my investment decision and think about the so-called ups and downs. It is also because of the blockchain that I have found that smart, savvy and capable people all over the world are here, while recognizing that many so-called new models are inseparable from the classic scams that have been repeated since a hundred years ago.

Traders are the smartest and most curious people I have met in the currency circle. Real experienced traders, often real money-making machines, have many years of experience in the traditional financial industry, and have long been in the direction of vectorization, and they are also thoroughly acquainted with the money and money. .

Hedge fund expert Jack Schwag has visited dozens of the world’s top traders, and finally assembled into a book “Financial Geek.” In the book he wrote that the trader group does have some unexpected common features, such as a strong desire for great change.

“Persons start with relatively little money and eventually become a multi-millionaire, and one of the ways is trading.” Jack mentioned in the book.

Of course, only a few peopleTo be truly successful, but at least the deal offers opportunities for change. Therefore, their story contains more things than rumors and money itself.

While is one of the professional traders I think is worth exploring. In order to explore the story behind the trader, I talked with him many times.

His story reflects how a Chinese is swaying under the global financial landscape, a person who is eager to seek knowledge and change, and feels about the world. His knowledge of people, money, and business is worth reading. Especially for thinking about transactions, we can be a window to get started with finance. I summed it up as “a way to make money without luck,” or “science guards wealth.” .

Is this “money-making machine” relying on intelligence, luck or insider information?

Most people think it’s easy for traders to make money, but it’s not easy to disclose.

“Don’t think that this line is smooth, every day is really a flame mountain, and it is hard to suffer in it.” He said that he had just entered the business, “I really did everything myself at the beginning. For example, CME (Chicago Business Exchange, the world’s largest futures and futures trading center) is the strongest battlefield, Goldman Sachs Morgan and other world’s top teams Hunting here. I am responsible for cocoa, wheat and gold trading. I work seventeen or eight hours a day for many years. It is going to get up at two in the morning, it is very hard.”

Professional traders usually serve major exchanges around the world, so they generally become market makers, providing bilateral quotes and deep market liquidity for the exchange. So in general, traders are always manipulating a large sum of money (although they may not be their own), which means At the same time of making a big profit, there is also the possibility of a big loss.

In the past ten years, the advancement trend of technology in the financial field has also become increasingly rapid. The Economist Financial Times has recently published many articles on the quantitative trends in Wall Street. The algorithm is currently advancing rapidly in the financial world, from a slightly auxiliary edge role to one of the main trends in the industry trend. A small company will be equipped with an algorithmic engineer or a quantitative trading team.

But then, Yi Yi believes that the concept of big data is actually very difficult, even if we collect the global index market in the past 100 years, the daily index foreign exchange bulk and various industry data, can only be regarded asSmall and medium-sized data, and real big data may not have any effect on finance for the time being.

“The weapon is only the derivative of the arm. The algorithm is by no means a omnipotent. It is just an accelerator of goodness and beauty, or just a semi-automatic tool. The core is still human, and it can only be human.” Shi Yiyi said that the whole idea of ​​the quantitative model is actually It is a programmatic conditional reflection mechanism. A happens to do 1, B happens to do 2, and AB happens to do 3.

When I asked what kind of trader to make money, he mentioned the financial concept of Alpha.

For example, the XX fund has risen/decreased by X% in the past X years. How is it performing? Well, still not good? To understand this problem, we must understand Alpha.

“As an ordinary investor, what we need to understand is that Alpha is actually a difference. It reflects the difference between the absolute return after defeating the market and a certain benchmark.” Easy to say, that is to say, the rate of return to beat the average market return is alpha, and the trader who produces the alpha value is the trader who beats the market.

In other words, the rate of return to beat the average market return is alpha, and the trader who produces the alpha value is the trader who beats the market.

I used to be a player, but he said it was not as exciting as the movie. “A winning professional player is not a gambling god. The daily life of a player is actually a very difficult math game, and there are other dangers beyond control.”

“Is it like the Chong Foundation expert Jack Schwager, who in this industry has a strong desire for change?” I asked.

“It can be understood that we are chasing more fun games. It is better to have a gambling time than to get a financial market game, and the energy is put into a bigger game. The most fun game in the world is the game between financial markets.” For those traders like Shi Yi, they don’t mind being tagged with high IQ and science students. What they really care about is that most people think that their ability to make money is just luck or gambling.

“There is really no one to eat all over the sky, there is no such thing as a rich mystery. For example, for more than ten years, I still keep a lot of time reading the annual report of the research report, with a total of more than 30,000 hours of trading, the frequency of transactions Over a million.”

“The real secret is actually only diligence.” He repeatedly stressed that everything is from birth to familiarity to professionalism. Only by heart, taking time, leaving yourself in the market to retain risks, letting hundreds of times go in and out every day. Hone your skills, and feel the connection between research and practice, the so-called disc sense and mysteryThe wonderful day of the pen is actually a long time, and there is no such thing as a so-called battle.

Traditional financial wars and how to look at the currency circle

“80% of drivers feel that driving is better than ordinary drivers. Most people feel that they are more attractive than average. When the market is skyrocketing, they must have their own income.”

Arbitrage is by no means a panacea, the core is risk management. When the team started in London, there were four or five competitors, more than they have money, and now there is no trace. The core difference is the awareness of risk management.

“80% of drivers feel that driving is better than ordinary drivers, and most people feel that they are more attractive than others.”

This is an example of the bankruptcy of the long-term capital management company of Robert Merton, the black swan Nobel laureate and the father of modern derivatives. His mentor, Paul Samirson, made similar predictions when he was the most shining, losing respect for the market, even if the Nobel Prize economist would wear a position.

The currency circle seems to be earning money by diligence. Everyone is really diligent, and it seems that they don’t have to sleep at night. This is the saying that “the currency is a day, the world is one year.”

There is a lot of gameplay that can’t be understood, such as 100 times leverage and 20 times the platform of a famous fixed-point blast. “These are almost never in traditional finance. The bigger the more mature the capital, the more tired and highly leveraged.”

Over-confidence in financial behavior is blindly optimistic, underestimating the risk of fanaticism, especially suitable for explaining the currency. He said: “There will be a lot of noise and false information in the bubble. The water army will produce a pseudo-flock, which will produce a herd effect, and overconfidence will increase the trading volume, leading to collective market enthusiasm.”

For the amaranth of the currency circle, the reason why it is so large and knows that it will be manipulated is because it is obsessed with a small probability event, and I feel that I am definitely lucky, and I think that I am not lucky enough to buy a ticket. .

In the case of Shi Yi, the game of the currency circle has not really started, including the number and proportion of elites in the industry.

For example, CME’s gold, the daily trading volume is many times more than all the cryptocurrency exchanges in the world. “Traditional finance does not have the concept of retail investors. There is no certain amount of money, no trading software, no regulatory licenses are not eligible to play this game, and monthly software money exchange data, etc.”