What is the connection between gambling, gaming and trading?
This is what I have always wanted to know, just this period of “Xu Mou” three have different degrees of dabbling, this interview, eye-opening.
If you like to go to Macau, the casino is definitely the place to punch in.
The island is home to famous casinos such as the Lisboa, Venetian and Galaxy, as well as Wynn and MGM Grand.
Thousands of gamblers are here, splashing the sun and the moon for their bucket of gold.
Crossing from Gongbei Port in Zhuhai, you don’t have to pay a fare to get a free casino bus to take you to the casino, you just have to get off and walk in.
We often talk about the difference between trading and gambling in Macau in 2015. Many traders have revealed the difference in the past, but I never quite understand the real difference.
And I and “Xu Mou” to discuss this transaction, exactly with gambling.
“Xu Mou” to establish a correct perception of risk, also thanks to the casino experience.
“Gambling and investing are very similar, and many people even think of investing as gambling.”
“Specifically, where is the difference?”
“In Macau casinos, you have fixed odds, and at this point, the casino makes a little bit easier money than the market. If you bet once a day, the objective win rate is close to 50 percent, but if you bet once a day in the market, you can’t do 50 percent.”
Of course, in the “Xu Mou” view, if you can, and master some knowledge of risk control, you can go to the market for gold.
“In terms of risk, what’s the difference?”
“The risk in a casino is fixed, but the investment is different every time, depending on how you set your stop loss.
In general, we set stops based on the market, not a fixed value.”
This is the core difference between gambling and investing, according to Seo.
Because the distance a trader needs to stop a loss and the potential to make money each time is variable, but the advantage is that the trader himself can control, in contrast to the casino, the odds are completely fixed.
However, whether it is in the casino or the market, there are common points that dare to take risks, with a small broad, and then three levels.
Detailed to the trading, whether to pass the three, “Xu Mou” believes that the test is a trader’s ability.
“This so-called three pass, is the investment inside the additional position.
How bold people, how much production.
To grasp the opportunity to make money, further need to control the risk, make a good plan for their capital, make betting rules, set the framework, when to enter the market, how much to bet, this is actually the trading system.”
If the first two levels are well executed, what traders need to do is through a series of theoretical analysis and reasoning, know their probability of loss is how much, how much probability of success to make money, three levels is not a terrible process.
Because it’s the early frame and the objective probability that gives you confidence.
In 2015, in Macao, “For example, if you have 10,000 RMB, and you think you can make 10,000 RMB once in 10 times, then you can directly split the capital into 10 pieces, so that a single complete loss will have no impact, as long as your 10 times in 10 is correct.
Even if you lose 9,000, you have a 100% chance of making back the last 1,000.”
In this way, the risk still appears to be a maximum loss of 10,000, but in fact the win ratio is magnified.
“Xu” thinks this is the right way to treat risk: break it down, turn it to your advantage, and use your objective win rate.
“Where are you at?”
“I can make money, but compound interest can’t run, I feel I am fast, after all, the problem is obvious, it is not difficult, so I can almost break through, it took a year.”
“Is it profitable enough?”
“I was hanging around, there was a big float, I just wanted to eat the second level so badly.
Impatience, such a character.”
“Xu Mou”, a “wonderful person” who spent several months in a Macao casino with his friends in 2015, just because his friend wanted to earn 40 million yuan to pay off debts, he accompanied him. Every time he earned 1 million yuan with 200,000 yuan principal, his friend took over the job, but his friend was impatient and could not grow from small to big. Later, he lost more than 10 million yuan.
But last year, luck was on his friend’s side and he became a billionaire.
As for “Xu Mou”, still very poor.
“Our common understanding is that you can’t control your emotions, and then you can.
Plus, the first risk is inevitable, the second risk is not terrible, it depends on whether you can tolerate it, and the third risk is often not proportional to the output in the trade.”
03. Gaming and Trading Casinos are exciting, and when it comes to finding a place to experience excitement, gaming is definitely on the list.
Coincidentally, now “Xu Mou Mou” partner with others to open a stand-alone game development company, and he himself is a real game fan.
What do games and transactions have in common?
“When it comes to competitive games, it’s a classic LOL quote: No wave with the wind, no throw against the wind.
It’s similar to investing.”
LOL is a 5V5 MOBA (multiplayer online tactical arena game) that emphasizes teamwork and your opponent’s status.
Like the market, sometimes you eat right and sometimes you don’t, which is kind of like Charlie Munger’s analogy of playing cards.
It is interesting that Seo explains the transaction with a game.
Meet the opponent is better than you = the market you don’t know = your cards are not good;
Wretched development = Light position try or empty position wait = lose as little money as possible;
Can’t decide your teammates = can’t decide the market = can’t decide what cards you play;
So, you can’t win hand to hand = you can’t win all the games without going back.
“In the game, if you play well by yourself, as long as your teammates are not too bad, you can usually win.
If you play really well, you can further reduce the impact of your teammates, which is to rely on technology to reduce the impact of random events on your trades.”
It’s also worth noting that when you play well, your worst enemy turns out to be you.
In the game world, when it is smooth, it is easy to engage in chaos with opponents and gradually lose their advantages. Entering the market just blindly expands risks and reduces profits.
“Riding the wind and waves, that’s what it means. The situation is so favorable to you that you start to take unnecessary risks without taking risks, and it’s easy to go against the wind.”
Although “Xu” talks a lot about gambling and games, his experience in trading is no less impressive.
His comments on his Zhihu account are enough to show that he is proud of himself.
He wanted to make a splash, so he never thought of working for others for a long time.
He passed the domestic fund assessment, even foreign investment banks invited interview, then did not go.
Even in 15 years forced to work for a living, work for a well-known group, 16 years proposed to leave, the branch manager also sent a car and a room to stay, but was refused one by one.
“I was greedy. I thought I could earn more, but I was restricted and stereotyped.
I want to open myself up to more possibilities, so losing those possibilities is a loss.
After all, I am still young, so I can fight more times.”
Before graduating in 2014, Xu saw an advertisement for foreign exchange trading and wanted to invest in stocks, but he couldn’t afford it.
I opened a simulated foreign exchange account with $50, which was very easy for a few days, and then I had my first firm offer account.
400 yuan, all kinds of blast warehouse practice, six months later have their first system.
Another 4,000 yuan entered the market, earning more than 20,000 yuan in the first month, including 4 times profit in one week.
This system is simply summarized in 3 words: light warehouse long line, judgment turn, general direction unchanged more than loss.
“Xu” at that time thought that as long as the system did not make the wrong unilateral market, the problem is not big, because in the shock of the top interval short, the bottom interval to do long, in line with human nature and low losses, “but I have experienced many black swans, especially the Swiss franc, according to this strategy will fail, light positions will explode, unless you are very light, but if that,
You might as well have bought Treasuries. There was a lot of risk in the system back then.”
One way or another, “Xu” trades at the top of his game.
The reality is that when you achieve something, people can’t help but come to you.
After profit, a friend invested 200 thousand, “Xu Mou” the first month to help him earn 190 thousand, after being added to 4 million, with the increase of positions, trading volume becomes larger, he only choose to do the medium and long term.
“I was in the business less than a year ago, betting on European QE success. At that time, various surveys, starting in September, as soon as the market rose, I continued to build positions at a high level. In November, I made a profit of $200,000 a day.
After the war, the account went from $650,000 to $1.2 million.”
At that time, even the Morgan Stanley team admired “Xu”, and the consensus among brokers was that “Xu” had made the most money in Chongqing.
For a trader who has been in the market for 10 months, success has come too soon, perhaps with some luck.
Whether you can accept the gift of the market, how many points of concentration.
As the saying goes, the wind, with its strength, carries me to the clouds, but the wonderful thing about the wind is that it also tends to accelerate the expansion of people.
Credit card use 200,000 yuan a month, put out the loan can not be collected.
Coupled with the back of the market shock, money does not come back to the influence of multiple factors, “Xu Mou” state began to go downhill, the naked eye can see the difference in life, such as divorce, choose to leave the house.
It was all these ups and downs that led to his market savvy.
“When I ran out of money, I had to further improve my level and reduce my dependence on the principal. At that time, I still owed more than 100,000 yuan to the bank.”
05. “Xu Mou”, a tightrope trader with a tough personality, did not seek help from his family at that time and was very depressed.
Debt, zero income, in order to avoid credit problems, have to borrow money to do business, and then use the money earned to live and repay the bank interest.
“If you are wrong, you will have no food, and you will become a black bank account, and you will not be able to turn over.
I was disgusted with myself at the time and felt that my mistakes had made a mess of my life, so I decided that if I couldn’t, I would kill myself by jumping off a building.
I was walking on a tightrope over a cliff, the kind that didn’t have any safety measures.”
As he adjusted his integration, he tried to change his personality.
In 2018, all by ability to seize the complete market, from the bottom to the top, and from the top to the bottom.
At the end of 2017, EURUSD was in a head and shoulder top break position. Generally speaking, the accuracy of the head and shoulder top shape was very high. But at that time, “Xu XX” felt that the state of the market was not quite right, so he judged that this was a false breakthrough.
“I remember when I was talking to people on the Kim Ten TV chat room, I said I saw 1.25, and then I took advantage of the profits at 1.175 and moved to 1.17. Then I took advantage of the profits again at 1.20 and finally took advantage of the profits and moved to 1.19.
Finally at 1.25 profit taking, maximum 900 risk, 3400 profit.
When the protective stop of 1.16 is set, I have a 100% chance of making money.”
A leopard cannot change its spots.
Later buying XRP, let “Xu Mou” realize that their human problems have not been solved.
Block chain was very crazy at that time, “Xu” bought around 2.2, because there was no leverage set, as long as their company did not go bankrupt or run away, they would keep it.
In retrospect, “Xu Mou” at that time to buy, psychological has been as the money does not exist.
His problem is one of complacency, a behavioral control problem.
To solve this problem, he opened a small account to fight fire with fire, hoping to force himself to change his bad habits through the super heavy bank.
After a sharp decline, “Xu Mou” let it directly follow other accounts for trading, so the latter stabilized.
For now, he is confident he can make the account profitable, because small money grows so quickly.
“For me, it’s not about turning 90 into 1,000. It’s about doing what’s right and not making mistakes.
And then for the 100x challenge, you’re going to have to go through the process of turning 90 into 1,000 twice, only 1,000 into 10,000 the second time.”
Stephen Allen Wynn, the founder of the Wynn Casino and a former chief gambler in Las Vegas, once said: “You can’t win $9 billion in a casino in Las Vegas, but you can in Macau!”
At the end of 2016, my friend and I went to Macao for a holiday. When we arrived at New Lisboa in the evening, it began to rain. My friend joked that water is wealth and I should try my luck in it.
That night, we played in it for half an hour and ended up with a small loss.
When we came out, the umbrella we put at the door disappeared, I laugh: well, this wealth scattered (umbrella) people happy ah!
Of course we’re not going to win $9 billion in a casino. We’re just going to gamble and have fun.
“Xu Mou” gambling history is wonderful, but he is disgusted with this, love to play games more love to do the game, that he traded for what?
“Consistently beat the market and then be financially free,” he says.
Casinos, games, trading, all have absolutely independent commonality, that is, win or lose.
Yes, winning and losing are about timing and luck, but the spirit of love, presumably, is also a kind of booster, which is why the results are so fascinating.
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