Thoughts on the struggle between ruthless machines and human nature

There are two main players dominating the current market in a game of cat and mouse: one is the ruthless machine quantitative trading, and the other is humans made of flesh and blood. These two form the market’s main contenders. The machines are super-intelligent; humans are experienced. The gap between the two is obvious. No matter how hard humans try, they can’t surpass machines driven by intelligence—so the market is extremely imbalanced right now. One side is laughing all the way to the bank, while the other is crying and lamenting. Existing capital is battling in the market all day long, while outside capital neither wants to nor dares to come in. This has led to the market’s severe “blood shortage” at present![Taoqiu Ba]

Seeing the broad market index fall from more than 4,000 points at the start of the bull market, all the way down to the 3,000-something range, people are asking: is the bull market still there?

Now the market spends every moment in panic. Please take a look at the investigation I privately did below, as shown in the figure.

One Leaf Qingqing is a friend in my life. He usually comes into contact with big shots a lot, and he spends every day soaking in their circles, mixing particularly well. The “little tough guy” he mentioned is someone I’ve also heard of. He is an undisputed investment big shot in the capital markets. Even someone of his level is crying and lamenting—how much more so for people like us who are half-knowledge! Let’s take a look at what my friend One Leaf Qingqing said below.

Seeing the conversation above, I’m sure everyone will have their own feelings. The “big bearded fellow” in the article is probably well known to everyone, the one who’s ‘very popular on the internet and talks so well that he talks people into being stunned—fans numbering in the tens of millions, seemingly all-capable!’ Even he ended up losing so badly he was blubbering, crying like crazy. Not to mention us little guys.

What about the technical school? Quantitative trading specifically eats the technical school. Quant trading designs the trap套 for you, specifically to get you to drill into it: you buy it and it sells; you sell it and it buys. It intentionally sets a trap, and the purpose is one thing—so that you can’t make money!!

The person called “Good Luck” in the article— I know her. She was a follower in an old group I used to be in. She’s a woman; she used to be in the army. One Leaf Qingqing said she has a great voice, and he always said he never had the chance to meet her. In the article, it says she’s a big investor, also a big investor of some securities company. She lost so badly she couldn’t take it anymore, and many around her also quit. Let’s think about what kind of market this is right now.

Quantitative trading makes money; the market isn’t short of capital, but capital is unwilling to come in. Once they come in, they get slaughtered. Even funds have gone to do quantitative trading. Tell me—how can this market still be played?

Datang Power Generation made everyone lose money. There’s nothing to do about it; this is all the result of quantitative trading’s mischief. We mere mortals really can’t fight against intelligent robots—that point can’t be denied. Even if the charts look good, they’re designed by quant. The trap is designed to lure you in, then it traps you step by step once you’re inside—bind you so you can’t run, and also leave you unwilling to quit. In the end, it makes you cut losses and get out completely.

Last Friday, I told everyone to buy Ziguang Co., Ltd.—more precisely, it was told to be bought by Xiao Que, because he lost too much on Datang Power Generation and was heavily holding it. Everyone did trading-for-profit (T) and spread out the cost, so they weren’t losing that much anymore. Even if they cut losses, they wouldn’t lose too badly. When buying Ziguang Co., Ltd., I didn’t dare let everyone buy again. At the time I thought like this: I chose two stocks—one is Shenzhen Tech (深科技), and the other is Ziguang Co., Ltd. After work, when I got home, I just spaced out and thought about it. When I woke up, Shenzhen Tech had already hit a limit-up. No choice—I had to buy Ziguang Co., Ltd. Not bad, only that I bought it a bit high. In the end, although it exploded off the board, it didn’t lose money at the close!

It’s a big-name stock, a representative in the tech sector. Like One Leaf Qingqing said—if even that one can’t make money, then this market really is finished!

At the time, there were two other fans who were also losing money on Datang. I told them to buy, but I couldn’t get in touch with them. If they didn’t buy, they weren’t willing; if they did buy, they feared they’d lose again. One in the U.S. invested a bit more?—Jujia (居美家) lost more than 10,000. I don’t know how much Shi Tu (诗图) lost. Buying would mean risk of another round of losses; not buying would mean fear of missing the opportunity. Facing this market, they felt extremely torn, spending every day and every moment in anxiety until their nerves were nearly breaking…

There was a fan—what was his name? I forgot. He gave me a tip. He told me a good trick for trading stocks, and he said it was mysterious, that after reading it I should delete it. He spoke in a mysterious way, and when he finally told me, I realized it was the old, outdated call-auction-based stock-picking method (集合竞价选股法). To be honest, this has been outdated for a long time and is basically practically eliminated. In the past, it might have been pretty useful. But now quant has messed up many of the old stock-picking methods. For example, as shown, the Qinglong Pipe Industry (青龙管业) that One Leaf Qingqing chose on Friday—look at it.

Look at how good the chart has been moving. If this were in normal times, buying it would definitely make money. But now I can’t say that anymore. One Leaf Qingqing, seeing such a good stock, didn’t dare to buy it—he was scared after letting quant mess with him!

He has studied stocks for years and figured out a set of his own stock-picking formula system. Someone was willing to pay several tens of thousands—how much exactly—to buy that formula system. One Leaf Qingqing told me: in the past, the accuracy of his formula system was 70% to 80%. Now it’s already failed. Once you buy, you get trapped. Nothing works anymore!

I’m also from the technical school. In the past, many trends looked good and I wouldn’t dare to buy them anymore. Now it’s like a tiger in the room—scared at the mere thought. The moment I buy a stock, quant automatically pops into my head without me even thinking, and I’m afraid of getting slaughtered.

A big shot called “Xiao Guizi” is also recognized by everyone as a great stock picker who started by himself without backing. He traded from 70,000 all the way to several million. Now he doesn’t play it anymore. After a few months, he hasn’t made any money; even a whole group lost money. I really admire this person—from not knowing anything to achieving fame in one battle, the long and rough journey is especially inspirational. You could say he’s a role model we learn from. Even he is crying and lamenting. It proves that this market really can’t be played anymore…

What can I say, exactly? I want to say something, but I don’t dare. If I don’t say, I feel suffocated. Is there quant overseas too? It seems there is. People there—how do they do it? Why don’t I ever hear complaints like ours? Could it be that their market is led mainly by institutions, while our market has both institutions and retail investors—and retail investors make up a particularly large share?

I think it’s like that. This creates an irreconcilable contradiction and conflict.

This problem has to be discussed. Those big investors and big shots aren’t participating anymore. With only retail investors left—who don’t understand anything—how can they face quant that sets up problems against retail investors everywhere, all the time? If even they get harvested and become afraid and stop playing, then what should be done? Should it still count as a career exit for retail investors to make money in the capital market?

It’s already 11 o’clock. I wrote for more than three hours; I’m really tired. Forget it—let me just see how many people there are on the platform, ask what they think, or ask if they have any good ideas and solutions. And speaking of it— even if they have ideas, what could they possibly change?!