"There are very few ways for an individual to start with relatively little capital and eventually become a multi-millionaire, and one of those ways is trading."
Stockbroker Jordan Belfort carefully rolled a hundred-dollar bill into a small tube, and a smile flashed across his face. He finally understood the secret of Wall Street success taught to him by his mentor Mark Hana.
Another meaning of this scene in the movie "The Wolf of Wall Street" is that money can make you get carried away and can't stop.
In the 1980s, Jordan Belfort, who made $22 million overnight in equity financing for shoe company Steve Madden, tried to deposit the money in a Swiss bank with the help of crooked banker Suriel, only to be betrayed by the banker , was eventually arrested.
This movie may have determined many people's usual impressions of Wall Street financial practitioners. They are smart, cunning, greedy and arrogant, and they enjoy money without restraint. But Lanny, who is a trader in Atlanta, USA, doesn't think so. "My colleagues think this movie is crazy for the sake of performance, and it's too exaggerated." Winston, a trader at Goldman Sachs, believes that you can only pass this movie Knowing that 35 years ago trading jobs did not go electronic, those stories belonged to "Old Wall Street".
What does a documentary version of a trader look like today? We've interviewed 12 traders, including Laney, over the past month. The interviews ultimately proved that there was a misunderstanding because the traders were “secret” and low-key — most of them requested anonymity and asked not to mention companies by name. Q is the pseudonym of one of them. He made no secrets that he had made millions in 3 months in 2014, but at the same time emphasized, "The boss told us not to accept any interviews with the media."
The same is true in the United States. Hedge fund expert Jack Schwager interviewed dozens of the world's top traders, and finally compiled a book "Financial Geek". All interviewees in the book also requested anonymity.
Beyond that, the group does have some expected common traits, such as a strong desire for radical change. "There are very few ways for an individual to start with a relatively small amount of money and eventually become a multi-millionaire, and one of them is trading." Jack mentioned in the book.
Of course, only a few make it, but at least trading offers the opportunity for change. So their story contains more than the rumors and deals themselves.
I heard that they always make a lot of money. What is the concept of "more"?
If you meet Winston at the New York headquarters of investment bank Goldman Sachs, you're likely to get the impression that traders are rich. The Goldman Sachs office building in New York is worth $2.1 billion. Winston worked at Goldman Sachs for 7 years, the first two years in the investment banking department, and transferred to the trading and sales department from 2008 to 2013.
After becoming a trader, he helped the company earn $2 million in the first year, $3.54 million in the second year, and $6 million in the third year. However, when asked, "How much money goes into your pocket every year?" He replied vaguely: "Let's say it is six figures." Six figures meant between $100,000 and $990,000, when the average annual income in the United States was only around $40,000.
Usually, the trader is manipulating a lot of money (even though it may not be his), which means big profits and big losses. It also means that large sums of money don't always sit in their hands for long and get a chance to cash in.
For trader Zhang Boxin , the success or failure of profit and loss is quite ambiguous. He can always "be as fine again after two days". Because he is engaged in financial products with high leverage (the ratio of foreign exchange margin used for foreign exchange speculation), including foreign exchange and precious metal transactions, Zhang Boxin can sometimes increase his capital tenfold in a month or two, but he can also "lose a car overnight." "Wrangler", this off-road vehicle is worth 300,000-500,000 RMB.
However, many interviewees said that they have indeed accumulated some wealth from transactions, and if they are lucky, the accumulation time is indeed not as long as that of ordinary people.
Q is a stock day trader born in the 1990s. April and May 2015 were the best times in his life to make money. He said in the interview that in two months, he earned one or two million. Q's company is composed of 30 post-90s, who manipulate billions of funds every day, and the most powerful one made 20 million. Not all of the money belonged to Q, but with the prevailing leverage of margin financing and securities lending at that time, after accumulating for almost a year, Q bought a house in Shanghai.
Fushan has a five-member team in Beijing, which just caught up with the recent good commodity futures market. This quarter they "earned eight figures" (ten million level). Before that, he worked as a U.S. stock trader for 3 years. At that time, he earned a fixed salary of 5,000 yuan per month in Beijing and managed an account of 300,000 US dollars. In the best month, he earned 390,000 yuan. 80,000 a month. In the U.S. stock exchange market, Fukuyama counted - he stayed for a total of 887 days, working from 8:30 in the evening to 6:00 the next morning, "in the end, he couldn't bear it anymore." After 887 days, he went back to Tianjin and bought a house and changed a car.
Do these "money-making machines" rely on intelligence, luck or inside information?
Since the money comes in faster, from a common sense, this group of people should have some extraordinary qualities. Most people will think that a science student with a super high IQ and a keen eye for numbers is more in line with the imagination of a trader.
Not so, Fukuyama said. "My IQ is not very high. In the trading industry, I don't pay much attention to the level of IQ. I have people from Tsinghua University and some who have not been admitted to university. The most important thing is learning ability and discipline." Trading commodity futures in a futures private equity company The famous "Mr. Zhu" said that 70% of the people around him are liberal arts students.
For this group, though, they don't mind being labeled a high-IQ, science student -- what they do mind is that most people think their jobs are just luck, a gamble. Of all the traders interviewed, no one was willing to admit that luck had or would play a role in them.
"Trading is definitely not about luck ," Wiston said, because he never intended to make a profit and had a strict trading strategy and code of conduct. “You need to know how to maximize your profits when you win and minimize your losses when you lose. As a trader, if you are right 60% of the time and wrong 40% of the time, that is already a great thing.”
Coming up with a trading strategy sounds like a no-brainer. "Ms. Zhu" manages hundreds of millions of funds. He claims that his trading strategy comes from a large amount of analysis and research for at least two or three months, and he will also refer to the report of a professional R&D analysis team during the period.
Gambling, by comparison, is a simple game of betting on one possibility. Fukuyama is very keen to point out that they are not relying on this 50% probability of winning. "Trading is not guessing, it's forecasting," he said. "Forecasting must be in two directions. I have strategies for ups and downs. For example, if the stock price falls below the strategy warning line, stop profit or stop loss immediately, and reduce the retracement. It can be understood as making money. In futures, if there is a trending upward market, the main strategy is to go long, but at the same time, there can be auxiliary strategies to adjust the market and actively reduce the profit margin.”
Another allegation that traders vehemently deny is that “traders have more inside information to help them strategize, giving them an edge over the rest of us.”
Insider trading does exist, and these people do benefit in the short term, but traders insist that doesn't mean ordinary people are at a disadvantage. "When those insiders are buying and selling wildly, you can also see it on the chart, and you can choose to follow up," Fukuyama said, "If you don't want to do such short-term trading, you can also make money in other ways. "Even in the A-share market, it is the same.
Are they constantly staring at the monitor?
After working as an investment bank analyst for two years, Winston decided to transfer to the trading department of Goldman Sachs. The reason is very simple. The pace of the investment banking department is too slow. make various decisions.
You can see the clues on the trader floor on the 5th floor of Goldman Sachs. The trading desks are placed side by side, and there are four, six or eight computer monitors in front of each trader. There is also a digital clock hanging from the ceiling. Not only the time in New York, but also the time in other global financial centers such as London, Hong Kong, Tokyo, etc., reminds these traders that every second counts.
Frank, who works in foreign exchange trading at Deutsche Bank in Singapore, has a life similar to that of Winston. When he arrives at the company at 7:00 every day, the first thing he does is to watch global news on the Bloomberg terminal, because global macroeconomic information is closely related to foreign exchange. When the news appears, it will be reflected in the currency price immediately. Every morning from 9:00 am to 11:30 am is the most stressful time of the day. He needs to keep an eye on market changes and news trends. "Basically, he is always quoting to customers, and traders are shouting and shouting, which is very noisy." Frank said.
Both Winston and Frank are known in the industry as executive traders , and as their names suggest, they do more of what the investment managers tell them to do. The manager will tell them the trading strategy, the range of stop loss and take profit, and any of their buying and selling actions must float within the range. Day trader Q has to be so focused during the four hours he trades each day that he can barely go to the bathroom.
For most executive traders, becoming an investment manager is their ultimate goal , which is the same concept as working for others in a large company and being your own boss. An investment manager may have traders, analysts, and economists working for him at the same time. He is the one who makes the final decision, and of course the one who gets the most profit after the transaction is successful.
Executive traders have a saying that "the position is in the person", but the investment manager is different, "I only need to spend a few months to make a trading strategy, and hand it over to the following traders to execute this strategy unconditionally. Strict risk control and follow-up Come in," said "Teacher Zhu". This is because the scale of funds he manages is too large, and he does relatively swing or long-term transactions, and does not need to keep an eye on the market and operate frequently.
"Ms. Zhu" compared this method to rock climbing among his many extreme sports hobbies. Rock climbing is very similar to futures trading. In the eyes of the public, this sport looks dangerous. "But in fact, rock climbing is composed of countless simple movements. Before you can enjoy the fun of rock climbing, you need a lot of rock climbing gym training and training. Learn how to operate equipment and optimize your physical fitness. The same goes for futures trading."
Even so well-organized, the financial crisis still hit hard.
Mr. Zhu has watched "The Big Short" 3 or 4 times repeatedly. This trader movie that emphasizes analysis and psychological endurance has resonated with him. "The Big Short" tells the story of several investors on Wall Street before the 2008 financial crisis. When everyone believed that real estate was the safest investment, they saw the bubble behind it.
The movie helped the traders redeem their image in The Wolf of Wall Street to some extent, this time they became brains and studied the market assiduously. The glass-eyed Michael is one of the best portrayals. He didn't go home or take a shower for several weeks, and he used a lot of numerical analysis in the office to prove that countless home mortgages were "a pile of dog shit with a pile of cat shit on top of it."
Michael was one of the few lucky people in the financial crisis, but fund manager Mark Baum, who also saw the bubble clearly, found that the object he had been shorting was his parent company Morgan Stanley, so he had no choice but to sell the company's stock.
The impact of the financial crisis has also changed the working environment for those who entered the industry after 2008, and they no longer have so much sweetness to taste. Laney heard from colleagues that before the crisis, his company would rent a yacht or rent a ski resort to celebrate a deal, but now, their celebrations have been reduced to eating and watching baseball games.
Investment banks with deep pockets are also restricted by the U.S. government to buy bonds and can only act as middlemen, buying and selling for others. As a result, banks have no bond inventory, the liquidity of the entire market is reduced, and the size of transactions is greatly reduced.
And there are far more crises than we have seen. Except for large-scale financial turmoil, crises can happen anytime.
But no matter what, there are always winners in the trading market, these traders claim.
Reduced trading volume during a market downturn is probably the biggest headache for traders, as they are unable to make a quick profit on the difference. But a simple stock decline may not be terrible for stock day traders, because "what we earn is liquidity and volatility, and the harder the decline, the happier we are, because what we earn is the difference." Day trader Tyler said.
Crises can be transformed into opportunities, but the sense of crisis still disturbs life unsurprisingly.
Zhang Boxin now believes that life and business should be clearly separated, and he has paid a high price for this understanding. Once, he made a mistake at work during the day, and had a quarrel with his girlfriend after returning home, so he made a wrong judgment when placing an order, and opened five lots (in futures trading, the unit is a lot), and the book funds directly shrank by 20,000 US dollars.
Han Yu, who works in the Yuanda Group, believes that the transaction is a struggle against itself from the beginning to the end. That's why they all like to read psychology books.
The Waterbug story is well worth hearing. At first, he felt that "the more I put in, the closer I am to success." Started futures trading in 2008, Waterbug invested 60,000 for the first time and lost it, invested 120,000 for the second time and lost it, and invested 240,000 for the third time. In 2010, the liquidation finally resulted in a loss of 2.7 million.
"I think it may be my mentality problem. After I placed the order, my hands would keep shaking, and I was very scared! After the order was placed, I would keep staring at the screen, afraid to leave, and panic. So I began to read a lot of anxiety, fear, Books on obsessive-compulsive disorder, after watching all the documentaries of these disorders, I found that I am not those patients. I started to study psychology again and studied for more than a year. These books only told me the symptoms and did not tell me the solution. The only way I found was Meditation, yoga. I also practice brush calligraphy, learn thangka, and learn Buddhist scriptures.
But the problem has not been solved. I no longer tremble when I place an order, and I am still losing money. I was making money in the first 3 weeks of the month, and lost all of it in the last week. In the end, I found that the problem was not mentality, but risk control. You just need to stop the loss. " He said.
"Ms. Zhu" thinks that anyone who plans to enter the industry needs to know: "In this industry, you are required to be two kinds of people, one is a fox, and the other is a lion. , You have to be like a lion, confident, and earn when you should earn.” Fukuyama used to like to argue with people, but now, he has obviously become a mixture of a lion and a fox: discuss the same, but never argue.
The aftermath of Lanny was that he couldn't focus on one thing for a long time, because his job as a trader required him to always multitask and he became easily distracted. This formed two extremes with Lanny’s friends in the investment bank, who were very detail-oriented and could only do one thing at a time.
No one can enlighten them and give the correct answer.
Many traders think that their idol is Buffett, but Buffett can only help so little. Buffett's operation method is also very simple, but it is no different from ordinary people to go long, short or close positions, but his philosophy and thinking methods are difficult to learn. People can only choose the holding direction and position size he chooses. And hold his judgment for lengths of time guesswork.
On Wall Street, specialized training institutions for futures traders can help them get promoted a little bit, and there are also many trading seminars and lectures in China, but in the eyes of professional traders, this is not credible. "Those who give lectures are all losers, and only those who have not achieved stable profits will go out to give lectures to make money." Waterbug said that he once received an invitation from a university to teach, and the teaching fee was 10,000 yuan a day, but he did the math and stayed at home. Stop loss can earn 700,000 in a single day.
It is also difficult for beginners to meet real mentors, and they don't even know how to ask questions. On the professional social platform "Zaixing", "Ms. Zhu" was interviewed about 40 times, and a large part of the interviewers wanted to know how the current market is and whether there is a way to make money forever. In addition, they often do not have much concept of the most critical trading strategies, fund management, risk control, and psychological state.
Does everyone want to squeeze into this industry?
During Winston’s more than five years at Goldman Sachs, he woke up at 5 o’clock in the morning every day for 3 months. After returning home, he had to drink to release the pressure, but it still didn’t help. He would still wake up in the middle of the night and wake up. The first action is to turn on the computer with half-closed eyes, check the market conditions in the Asian market, and make sure everything is ok before continuing to sleep.
He believes that traders will never be happy, "because when you make money, you will regret why you didn't buy more, and when you lose money, you will feel the same way. You are always questioning yourself, should I do it? this matter?"
In 2013, he felt his health was affected and chose to resign. Over the next nine months, he traveled to 18 countries. All costs cost him $35,000, "if you think about what it costs you to live in New York for five months," he said.
Meanwhile, Goldman's trading desk is shrinking, with more and more deal managers being laid off. The trading departments of big banks are all shrinking. Deutsche Bank has only recruited 300 traders in Asia this year, and the nine major investment banks together do not exceed 1,000 people. Frank in Germany was a graduate of Fudan Mathematics Department in 2013. Among the 200 people who graduated from Fudan Mathematics Department in the same class, only 4 were traders.
One reason is that after the financial crisis, the scale of transactions decreased. The second reason is that as technology continues to advance, computers have replaced human work to a certain extent. Computers can analyze large amounts of data and assess risks in a short period of time. It is the senior managers who suffer first, because they are the most expensive – and the existence of these senior positions is the reason for junior traders to work hard.
Compared with the nine major investment banks, the threshold for small companies and proprietary traders is relatively low. Xiaotian, a day trader, submitted his resume on Zhaopin. After three rounds of "very watery" interviews, he joined the job. Tyler also submitted his resume on 51job, and passed the interview in just one round. He got to know the situation briefly on the first day, and started to operate on the second day.
For them, the dream of making a lot of money from the grassroots may come true, and Q is one of them. However, he is not happy now that he bought a house in Shanghai. The sense of superiority he quickly established among his peers when he first made a lot of money "disappeared soon. My job is like a modular assembly line. Anyone can learn to sell high and buy low.” Q boredly said that this assembly line is also vulnerable to policy risks. Since last year, he has been idle for a year. He has nothing to do and earns little. Now he wants to have a solid job.
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