Why don't Chinese god-level traders do foreign exchange?

Traders are people who operate for other people's assets. Traders mainly serve large investors (investment institutions), they are often traders, have a good grasp of the disk, can master the timing of opening position squaring according to customer requirements, master the skills of building and throwing chips, and use the advantage of capital to control the development of the disk to a certain extent. They can detect every subtle change in the disk, thereby reducing the occurrence of risks.

There are not a few great god-level traders in China, but it seems that so far, we have not heard the name of a very famous foreign exchange trader in China. So why has there not been a great god-level foreign exchange trader in our country?

In today's article, let's discuss this issue together.

The conclusion of the first generation of Chinese traders is very sad

First, let's take a look at the real fate of the first generation of Chinese traders. According to statistics, the lives of the first batch of institutional traders in China were not as ordinary people imagine, and even as a whole, they were losers. Some of them ended up going bankrupt, fleeing or even being arrested and imprisoned.

The first generation of traders was in the early days of China's reform and opening up. At that time, there was only one bourse in Shanghai in China's stock market. Stock trading took the T + 0 operation, that is, buying on the same day and selling on the same day. The rise and fall of stocks were completely out of order. At that time, there were indeed a large number of people who became rich overnight. Some people saw that the returns of stocks were so profiteering, and they borrowed money everywhere, even at the expense of pressing the house out. That was because people's wages were very low, it was difficult to come up with a large amount of money to invest in stocks. Some people lost their minds in the tempting money. They didn't hesitate to borrow usurious loans to invest in stocks. They lost their minds completely. Those who made money made money. Those who lost their money irrationally often jumped off buildings. Some people took advantage of their positions to embezzle public funds Stock trading, earned back the principal, lost the girl ran out of the country, then in order to buy a new stock to win the lottery, a day or two in advance in the exchange waiting in line outside (when there was no electronic trading), that face is rather grand, when China's stock market through the painful development, slowly into the benign track, the first generation of stock investors almost all fell quite tragically, leaving only a few to make money at that time.

China's second generation of trading is still dominated by the stock market

Cao Mingcheng, a private equity tycoon, is a senior trader in the private equity circle. He has worked in many consulting companies and investment institutions and has directly participated in the trading of large funds. He once said in an exclusive interview with reporters that although the second generation of traders has a more complete trading environment than the first generation, the early years of the traders' lives are not very good, the psychological pressure is real, and the real success is very rare. Some were investigated and fled, and some lost in the subsequent four-year bear market (2001-2005.).

From this point of view, traders in our country are mainly involved in the stock market and some people fail to retire successfully. So why don't they choose foreign exchange trading that is more convenient and has more trading options? Perhaps the following description of Zhihu netizens just answers this question.

Zhihu author Bruce said:

In fact, I have come into contact with or heard of domestic large traders who do foreign exchange and participate in foreign exchange futures, but the overall participation is indeed not very high. According to my trading experience and peer exchanges in recent years, I have come up with a little opinion. The main reasons should include the following aspects:

China's capital markets are not open, the exchange rate claimed to be a managed floating exchange rate system is actually similar to the fixed exchange rate, at least by the government's control a lot, so in a closed market to participate in foreign varieties or international varieties more difficult, the same reason can also be said that the large market players participate in the US stock market is very small, very few participate in the future international market.

2. There is a specialization in the art industry. If the stock is well done, there is no need to do foreign exchange or futures. There is not enough time and energy, and the operation techniques and knowledge structures that support the operation varieties are also different. There is no need to take risks in unfamiliar markets.

3. The volatility of foreign exchange is very small. According to the percentage, the monthly and annual average ranges are limited, which makes it even more difficult to form a long-term trend. With the same leverage ratio (different from the leverage concept of margin), the returns of some commodity futures are more considerable, and the risks are not necessarily greater than those of foreign exchange. Foreign exchange is a macro financial target. Some commodity futures belong to the medium target, and the subdivided small varieties are even very micro. From the perspective of the entire market behavior, it is obvious which is easier to pry. As for increasing the leverage ratio, it has always been discouraged. The margin ratio of many small platforms can make people increase the margin to an outrageous level. In addition, there is the credit risk of the platform itself, which is worrying about the formality. This is completely the gambling industry and cannot be considered an investment. Unless it is a single game, investors and regular institutions who want to survive in the market for a long time rarely touch this.

4. The contract value of one order of foreign exchange futures is about 100,000 US dollars, this threshold is good; the interbank market is 1 million US dollars, which belongs to the wholesale market, and it is not the next two orders, the threshold is indeed higher. I have participated in foreign exchange futures, but I have not done it between banks. A domestic investment institution I contacted before came up with × billion US dollars to do foreign exchange futures. I don't know why I didn't participate in the interbank market. You must know that the capacity of the interbank market is very large. The risk of market impact is very low, and it is easier to trade. It may be that they also do US dollar index futures, so put them together. It should not be without this awareness.

5. Becauseforeign exchange marketTherefore, I personally think that it is more advantageous for a large amount of funds to participate in it, and the expected return corresponding to volatility is also considerable, as long as you can grasp a considerable range of foreign exchange fluctuations. Because small futures varieties are indeed limited in capacity, if the amount of funds is large, the market impact cost is large, and the immediacy of operation cannot be guaranteed. On the contrary, if you do not reach a certain volume, it is better to participate in commodity futures. Its volatility, potential market and profit opportunities can be provided are also more considerable. If you reach a certain volume, it is another matter. In fact, many people are not large enough. After all, the domestic capital markets have just started, and there are not many Private Offering Funds in scale.

I have done foreign exchange futures trading before, the same effort, in the case of limiting the use of leverage, Brent/WTI crude oil futures and COMEX gold futures and other varieties of yield is better than foreign exchange futures, of course, it can also be said that in the underlying asset price volatility is relatively higher should reduce the leverage ratio of funds, such as commodity futures to foreign exchange, but the overall risk control is not much different, of course, the first choice is higher yield, so these two years to do more crude oil futures. If you do foreign exchange futures in order to expand the income of forced increase leverage, or in the fixed account funds to increase trading volume, it may be consistent from the income results, but the process of doing investment is also more torturous, in the intraday time will be longer, pay attention to more variables, it is better to do mainstream commodities.

Do you also think that there are too few foreign exchange traders in China?