During this time, the meme coin has risen amazingly, everyone knows that the meme coin is pure air, why do funds always like to speculate? It's already risen a lot, and even ordinary ** doesn't dare to chase high, why can it continue to rise? This requires an understanding of the underlying principle and core logic in order to understand the true meaning of "trading".
Investing and trading are differentInvestment focuses on discovering value, and fundamentals are important; The core of trading is the capital game, and popularity is the most important.
To understand trading, it is necessary to understand how participants in the secondary market make profits.
Generally speaking, the core business model of the trading platform is to charge fees, which is small but stable; Most of the ** and bookmakers make money by selling high and buying low, which requires market volatility and risk.
The above are all easy-to-understand ways to make profits, but the most profitable in the secondary market is not the above two, butThe "forced position" in the derivatives market is the most profitable and bloodiest battlefield for institutions. At the same time, it can also explain: why is it still soaring after rising so much? It's been so much and it's still falling wildly? It is completely impossible to explain by fundamentals and common sense.
The income of institutions is similar to that of grabbing money, which is far greater than the handling fee and the income from selling high and buying low.
In the secondary market, there is a basic truth: there are always people who are short when they rise, and there are always people who are long when they fall. Shorting and longing belong to the derivatives market and are leveraged. In a rising market, if there is a huge amount of money shorted, if you are a large institution, do you want to eat the other party? Similarly, in a declining market, if there is a huge amount of money**, do you want to eat the other party?
Directly eating the other party's funds is, of course, the most profitable. This is the cruelty of the financial secondary marketWall Street capitalists are even willing to provoke conflicts and wage war in order to influence commodities.
If there is a large amount of funds short, they will pull up the forced position, and the short funds will increase the position, and then pull up the forced position, until the short funds are unable to increase the position again, and it will be blown upAll the funds of the short side are in the bag, and then ** will be reversed. So don't worry about the institutions constantly at a high level, if the spot falls down and can't be sold, there will be a loss, even if there is a loss, this loss is very small compared with the funds harvested in the derivatives market.
Understanding this underlying principle, you will understand one sentence:Don't go against the trend, the trend is up, it has nothing to do with fundamentals, nothing to do with value, only to deal with money games, the counter-trend funds do not run out (at the end of the trend there is often a surge and **) the trend is difficult to end.
In the case of the recent meme coins, they have more than enough shuffling and there are not many institutional chips, and the bookmaker has pushed ** up 10 times in just a few trading days. Many funds think that MEME is pure air, a large number of short, and the market maker uses the advantage of funds to push up the spot, and at the same time in the derivatives market to short, the derivatives market is almost harvested, and then sell the spot to kill.
In particular, there are leveraged trading varieties, don't guess the top and bottom against the trend, it's really a mantis arm as a car.