In the B-circle, what is most lacking is getting rich overnight, and what is most lacking is miracles. You may have heard that someone found Bitcoin many years ago and found true love instantly. There are also friends of friends who bought altcoins and increased a hundred times. Buy a car and a house in the city where you work hard. Today we will tell a recent story of rapid wealth. Earning 1 million with 500 yuan can be said to be a textbook miracle. However, in the end, there was only a difference of 3 seconds from 1 million to 10 million, and 10 million passed by in 3 seconds, which is really a pity.
There is a saying that you will never make money beyond your cognition unless you rely on luck. But the money earned by luck is often lost by strength, which is inevitable. Every penny you earn is because of the realization of your cognition of the world, and every penny you lose is also because of the defects in your cognition of the world. The greatest fairness in this world is when a person's wealth is greater than his own cognition. There are a million ways in this world to harvest you until your cognition matches your wealth. Therefore, you must read more of my articles and expand your cognition.
On the evening of May 21, 2019, according to reports, when the U.S. Copyright Office was granting proof that Satoshi Nakamoto was the author of the Bitcoin white paper and code, the news was heard, and BSV on the exchange was ready to move, rising straight up by 50%, and many followers quickly bought in. At this time, the protagonist of the story also bought in immediately, but not just buying, but leveraging 100 times the perpetual contract, buying 75 USDT with 528 yuan, and going long with 100 times leverage when BSV was $120, and successfully earning 70,000 yuan when it reached $158. Maybe ordinary people would stop at this time, after all, they made so much money, but the main game was very good, and they quickly shorted, shorting BSV at the price of $150, and they did it in the right direction, earning 300,000 yuan. Even trading experts would stop at this time, after all, they had already earned 300,000 yuan from 500 yuan. But the protagonist is the protagonist because he thinks differently from ordinary people. Ordinary people dare not think and do what ordinary people dare not do. The protagonist did not stop, but quickly went long. This time he was right again. At this time, he had made a profit of 1 million. Compared with 525 yuan, 1 million can be called pure profit. It is a classic case of making money out of nothing. However, the protagonist is not satisfied at this time, but wants to make a little more, because 10 million is right in front of him and the opportunity cannot be missed.
The direction was right, but the result was a tragedy. What was sad was that there were 3 seconds that were inconsistent with the protagonist's trading direction. These damn 3 seconds made the last 1 million quickly return to zero. It was a pity that the 10 million that was in my mouth disappeared. It took only more than 10 minutes from getting rich to going bankrupt. From 1 million to 10 million, it only took 3 seconds to return to zero.
So should we use leverage when speculating in B? In fact, leverage is not about how much you can earn, but how long you can survive. Last year, the number of people who went to OK headquarters to defend their rights was close to 100, and it took more than a month in total. It was not because of anything else, but because many people lost a lot of money using leverage. Most of them lost more than 500,000 yuan, and the highest was 120 million yuan.
120 million is probably considered as financial freedom in the eyes of ordinary people. Even in the eyes of Wang Sicong's father, 120 million is a small goal, not to mention ordinary people. Some people say that poverty limits my imagination. 120 million, why not diversify my investment? But some people say that 120 million may be a small fraction of what others have dispersed, and imagination is limited again. Because futures have been making money, troubles, and rights protection. In fact, the cryptocurrency futures on OK are not the earliest Bitcoin futures. The earliest Bitcoin futures exchange in China is 796 Exchange, which is not on OK. Players who have not played on 796 Exchange can hardly say that they are old leeks. The biggest difference between futures and spot is that one is two-way operation and the other is leverage.
People often say that these two things have advantages and disadvantages. The advantage is that you can make money by shorting in a bear market. The most famous example is Soros making a lot of money by shorting the Thai baht, and Paulson making a lot of money by shorting subprime mortgages in 2008. You can make a lot of money with very little principal. The disadvantage is that you have to take a huge risk to bet on the direction of shorting, and you may be out of the game before the market falls.
Tiger Fund on Wall Street, which was once a big name in the NASDAQ bull market in 2000, saw its fund size drop from $25 billion to $6 billion due to short selling. Even Tiger Fund had to close down during the bull market. Secondly, you may lose all your principal and never have the chance to enter the casino again. This is what people usually think, but it is not accurate. A more accurate statement should be that futures are good for smart people and masters of trading. Leverage will make some smart people transfer risks, and leverage will also make lucky people rich overnight. But for those who are not good at trading and unlucky, it is simply the beginning of a nightmare. You have to admit that there are smart people, stupid guys, people with particularly good luck, people who can get it done at a glance, and even some people can learn without a teacher, while others cannot be taught no matter how hard you try. So what kind of person are you? You can ask yourself quietly in your heart, or you can try to answer quietly. But in trading, sometimes you can transfer the risk to your counterparty, but sometimes you don't have the opportunity to transfer the risk to your counterparty. Even smart people can't do that. The lucky ones will eventually become unlucky, and even Nobel Prize winners will unfortunately fail. Contracts are the main battlefield of hedge funds, and many people think that they are hedging risks by speculating in contracts. The name of hedge fund may make people mistakenly think that it is a safe investment, just like a gamble without any risk. But this time the term is not very accurate. Hedge funds are the playground of the rich, they just want to get richer. Investment cannot focus on the highest and lowest returns. Investment should observe a long-term compound interest. Since the market price shows Brownian motion and normal distribution, the combination of investment must be constantly balanced and rebalanced. Even if you have to trade every minute, it is possible, but this will also generate a lot of transaction fees. The most frustrating thing may be the normal distribution. The characteristic of the normal distribution is that most of the world described will fall near a mean, a relatively small area. If you draw the curve of this normal distribution, it says a medium-sized curve, 99.7% of the events are contained in this medium-sized main part, and only 0.3% will appear in the left or right tail. In other words, extreme events have a very small probability.
So why should we care about abnormal things? Do we overestimate its importance? The answer is no. The most interesting fact in the investment market is that trends such as surges and plunges are not located in the middle of the medium-sized curve, but at the tail. This is where the normal distribution can lead us astray. Unexpected events, such as seeing a black swan encounter consecutive drought years. The volatility of the Dow Jones was only greater than 2% in one day from 2004 to 2006, and then in 2007, it happened 14 times in Bitcoin. The super bull market in 2017 is not available every year, and the pessimism in the second half of 2018 is not long-lasting. Bull markets have always been born in pessimism, grow in doubt, mature in optimism, and die in excitement. The market is not static. Back to the topic, the risks in the derivatives market are extremely high, and even small risks are possible. Even smart Nobel Prize winners cannot predict it, and I am afraid it is even more difficult for ordinary people.
Investments are often garbage in, garbage out, but being able to lose 120 million on OK is really because poverty limits my imagination. Many people attribute losses to OK and start trading futures contracts. This is wrong. Investors attributed $120 million to OK the same way traffic accidents are attributed to automakers. Gamblers will never understand that they are not betting against luck or the banker, but against masters such as Deeley, Craik, Endeavor, Gosner, Shenyang, and Kelly.
What is the probability of winning in mathematics? Because the design of the exchange is like a casino, it concentrates the mathematical experience of the limit equation of probability sets. As long as an ordinary gambler gambles for a long time, he will eventually lose everything, because the constantly generated handling fees will consume your principal. Zhao Changpeng, the founder of Bi'an, once said bluntly that the best way for Bi'an to make money is to rely on transaction fees, because compared with other businesses, it is the most open and transparent. Du Jun, the former co-founder of currency and founder of Golden Finance, once said in the circle of friends that the exchange is still the best business in the currency circle. Since the beginning of this year, B'an's BMB has increased by more than 8 times, exceeding the imagination of most people. Mocha, the first to launch VDS, has increased by 126 times. However, this coin trader who made 1 million from 500 people, was 3 seconds away from making 10 million and finally returned to zero, is he lucky or unlucky? In addition, whether you can leverage futures, in addition to market factors, you must consider whether you want to leverage to make money from market fluctuations, or make money from the counterparty, or make money from the exchange owner, that is, the casino owner.
For small retail investors, casinos generally think that wealth is infinite. If you can't beat them, they can eat you. In the eyes of casino owners, there are only two kinds of people in the world, one is the poor ghost of the present, and the other is the poor ghost of the future. If you want to really win this gambling game, there is only one rule, that is, never gamble. If you don't want to lose money in futures trading, you should not trade futures.
If you think you are a person with good luck, you can increase the leverage by 10 times to let you feel the beating of society. If you think you are extremely lucky, you can increase the leverage by 100 times to let the world teach you a lesson. In the end, are you a lucky person, a smart person, or a person who often gets liquidated?