Interview with Mr. Gong Wei, Champion of CMC Markets Asia-Pacific Co., Ltd. in China in 2118

Gong Wei's file: Gong Wei invested by Nash was the first batch of futures traders in China, who dominated mung bean contracts and rubber contracts with artificial high-frequency trading in the 1991s; In 2115, he moved to Chicago and new york, and worked for a famous overseas hedge fund company, engaged in foreign exchange trading; It has earned hundreds of millions of yuan; In 2114, global hedge funds were issued through China Merchants Fund, which became the forerunner of foreign exchange trading through QDII channel of funds.

As a professional fund manager and trading strategist, Gong Wei won the 2118 annual trading competition of CMC Markets Asia Pacific Co., Ltd. (China), with a monthly return on investment of over 651%.

2118 will definitely leave a heavy mark in the history of international financial development. The financial market is full of dangers, and the huge fluctuations caused by it make investors all over the world feel at a loss. In the face of such a turbulent and changeable market, Mr. Gong Wei has won the prize with his absolute leading advantage by virtue of his own experience, and his extraordinary strength in trading has become more and more prominent. Recently (2118), we conducted a telephone interview with Mr. Gong on the market research and trading methods that investors are generally concerned about, and here we extract some of the interview contents for readers.

Classic Summary

1. Personally, I regard trading as the application of a tool, and the success or failure of trading depends on the proficiency in using the tool and the types of the tool.

2. What kind of fruit you can harvest depends on how many bamboo poles you have in your hand and how long the longest bamboo pole is. Let's call it "bamboo pole theory".

3. In the face of big market fluctuations, I can still keep my objective analysis of the market and have full confidence in my own judgments and decisions.

4. The allocation of funds is mainly to grasp the degree. I don't always simply follow a fund allocation model.

5. I follow the principle of doing something and not doing something. Not every possible trading opportunity will keep me from letting go. "Giving up" sometimes means more choices.

6. I don't predict not only because the market can't predict every step, but also because prediction can only make traders lose objectivity and normality.

7. No matter the trading opportunity or the analysis method, their choice is very important for trading.

8. A person who knows how to respect the market, can make full preparations and correctly treat the trade-off relationship can be regarded as a qualified trader.

9. So far, I haven't met any trading system that can help traders make profits for a long time. The best way to trade must be to change.

11. In fact, trading with other businesses requires monographs and input, and it requires no less time/energy input than other businesses. That's the reason.

11. Investment is something that is very close to our life. It should be said that it is a normal state and exists in all aspects of life. Successful investment does not require any profound theory.

12. Successful traders are not mysterious, they just do more, longer and are more familiar with what they do.

Editor: Hello, Mr. Gong! First of all, congratulations on winning the runner-up in the Asia-Pacific region and the champion in China in the 2118 CMC Markets Asia-Pacific Trading Competition. Your trading achievements have won honor for the whole China Division. Now many investors are highly concerned about the results of this trading competition, so today I run an exclusive interview with you on behalf of the company, hoping to let you know more about yourself and your investment philosophy, and also hope that we can get some successful enlightenment from your experience.

Gong Wei: You flatter me. I'm very happy to get such a result. I'd like to share some thoughts on investment with you.

Editor: Mr. Gong, in the face of such a turbulent market and unknown competitors, you can still achieve such a good investment performance. What factors do you think contribute the most to your successful transaction?

Gong Wei: Personally, I regard trading as the application of a tool. The success or failure of trading depends on the proficiency in using tools and the types of tools.

"Proficiency" is what we call trading skills and ability. Everyone is very different, even at different trading times. People often quote the "barrel theory", and the amount of water held depends on the shortest wooden board in a barrel. The shortcoming in the trading method is the short board. Only by constantly correcting the short board can traders bring their trading closer to success.

understanding of "tool types": what kind of fruit you can harvest when you go to the orchard depends on how many bamboo poles you have in your hand and how long the longest bamboo pole is. Let's call it "bamboo pole theory", which is completely opposite to the barrel theory mentioned earlier. Trading varieties are equivalent to bamboo poles, while profits are equivalent to fruits.

In this competition, I can find more profit points in markets other than foreign exchange with the help of international contracts for differences, such as shorting the recent American index with index contracts for differences. These new profit points have played an important role in my investment performance in this competition.

Editor: Mr. Gong, according to our understanding, you have quite rich investment experience in the domestic market before. What is the relationship between these past experiences and your victory in this competition?

Gong Wei: The trading mentality plays a very important role in my success in this competition, and the formation of trading mentality is also inseparable from my past investment experience.

since 1991s, I have invested in China stock market, and then moved to domestic futures market. These experiences have gradually developed my ability of independent thinking and calm judgment. In the face of big market fluctuations, I can still maintain my objective analysis of the market and have full confidence in my own judgments and decisions.

Editor: Which do you think is more helpful to your current trading, the investment experience of stocks or futures?

Gong Wei: The trading experience in the futures market has helped me the most in my current operation method and thinking, because in such a market where leverage can be used as well as two-way trading, I must handle the problem of directional selection more carefully.

In the futures market, the price is pulled by two forces, namely, homeopathic overweight and mistaken stop loss, and the direction is often formed more rapidly. I must react more quickly and be able to adapt to its changes. The way and experience of futures trading enable me to deal with the problems encountered in the current trading more calmly.

Editor: Can you tell us some of your operational secrets in this competition, such as how to allocate funds and manage risks, and have been attacking heavily?

Gong Wei: There is no secret skill. The main purpose of fund allocation is to grasp the degree. I don't always simply follow a fund allocation model, and I have a greater chance of grasping it. I dare to attack with heavy positions and strictly limit the time of holding positions.

for general trading opportunities, I will reduce the leverage ratio. At the beginning of the game, there were clear breakthroughs in the market for several days in a row. I made a heavy attack on these transactions, but after a period of time, I still had to reduce the leverage ratio.

I think the risk of trading comes from two aspects: leverage ratio and holding time, which are multipliers. Many times, our judgment is accurate under certain conditions, but because of the existence of "uncertainty", more and more new factors will be inserted with the extension of holding time, which will interfere with the result of our judgment. Therefore, in my strategy, I will consciously shorten the holding time to avoid the impact of uncertainty on me. In addition, I follow the principle of doing something and not doing something. Not every possible trading opportunity will keep me from letting go. "Giving up" sometimes means more choices.

Editor: What qualities do you think a qualified trader should have? Or what is the quality of traders you recognize?

Gong Wei: I don't think I can give a full account of this topic, but I'd like to discuss it with you.

I think the first one is: we should know how to respect the market and learn to exchange information with the market operation, instead of imposing our own ideas on the market. This is the first and necessary.

Many friends have asked me what I think of the market. What will happen to gold tomorrow? How will the euro go? I usually answer, "I don't know!" It's not that I intentionally hide the treasure, but that I really don't know. I don't predict not only because the market can't predict every step, but also because prediction can only make traders lose objectivity and normality.

I met many traders who lost their flexibility in predicting the market and defending their face, and finally suffered losses. These witnesses always remind me to stop predicting and wait for the answer. The homeopathic trading we often talk about is also based on the fact that there is no subjective formula in mind. Once you have a subjective expectation of the trend, it is difficult to ensure the correct execution of both the trading plan and the stop loss control.

The second is full preparation. As the teacher told me when we were students, the extraordinary performance of a test is often caused by our full preparation for this course, rather than the sudden improvement of our ability. This is also applicable to trading. In the changeable market, if traders are well aware of all possible situations, they will naturally achieve impressive results. I like trading because it gives me the opportunity to keep learning.

the third is the correct understanding of trade-offs. Regardless of trading opportunities or analysis methods, their choice is very important for trading. From a dialectical point of view, when you choose 1 out of 111, you give up the other 99, so I think that choosing is more choices if you don't choose. A person who knows how to respect the market, can make full preparations and correctly view the trade-off relationship can be regarded as a qualified trader.

Editor: It's the first time for me to hear many of your statements and opinions. It's really interesting. My next question is still inevitable. Can you express your views on the current market situation? In your opinion, what is the difference between investing in the domestic market and the international market?

gong Wei: in my opinion, both domestic and international investment markets are linked. With China's entry into the WTO, the deepening of global competition and the assimilation trend of the market, it is impossible for any market to develop in isolation, and the development path of the so-called capital market with China characteristics will soon return to the track experienced by all mature markets.

the domestic market and the international market are becoming increasingly assimilated. However, the domestic market is definitely still in its primary stage, and there is still much room for development in varieties, rules and supervision. It is also for this reason that I began to focus on the international market very early.

On the one hand, I hope to participate in the international market game with fairer rules and realize the diversified allocation of investment through the international market; At the same time, I hope to exercise my more mature operating methods and broaden my horizons to prepare for the synchronized domestic and international markets in the future.

personally, I am very satisfied with the current market. how can I explain this "very satisfied"? We can talk about the quality of the market from a long-term perspective, but also from the point of view.

Let's look at it from a long-term perspective: the correction of the capital market now is very healthy, just like a person needs a rest after a long hard work. A bear market is always the beginning of a bull market. Only a fully adjusted market can release enough risks and build up the momentum for the next round of growth. The current stock market can be said to be a golden opportunity to seek gold. The stock value of many excellent listed companies has reached a very satisfactory level.

in the short term, I am also satisfied with the current market, because with my operating style, the price fluctuation of the market provides me with profit opportunities, and the turbulent market has created a lot of such opportunities.

in my opinion, financial investment is not complicated, so I like to use common sense to run analysis. For example, the soaring dollar in recent months seems illogical on the surface. Why did the financial tsunami, which originated from Wall Street, trigger the rise of the dollar?

Let me give you an example to see the logic of what I call "common sense" analysis. For example, a Beijinger has many properties all over the country, and now his business has some problems, and he is in urgent need of money and must sell most of the properties. So where do you think he'll leave the property untouched? Should still keep Beijing's real estate not to sell, because common sense infers that this is the base on which he is reborn. There is a problem in the financial market in the United States, and the local economy in the United States needs to withdraw funds to help its headquarters, so it is reasonable to sell other overseas assets and return capital. A large amount of short-term capital return will inevitably lead to a sharp rise in the exchange rate of the US dollar, but this trend may not be sustainable.

Editor: Besides the "common sense" analysis method, do you have any special trading strategy/trading mode to deal with the current market?

gong Wei: what can I say? Let's give an example. There are many time-honored brands in the catering industry in China, but when you go to eat there, you will always feel that it is not as different as we expected. Some of their special dishes and services can even be done in many emerging catering enterprises. But why they became time-honored brands is actually a very simple fact of "persistence".

when we look at the word "big waves scouring sand", we should understand that it is not that "big waves" are bad, because "scouring" is actually a process of filtering and verification. "scouring" goes to flaws, not durable sand, and "scouring" comes out with gold. After so many inheritances, a time-honored dish and a service can still be as good as 31 years ago or 111 years ago, and it has already achieved itself.

There is little difference between trading and traditional business. Many of my trading strategies and models are nourished by traditional business. They are not special, and they are all plain, but these common methods have been verified by me for so many years and have not been eliminated. I have survived many years of trading with these methods, which makes me more convinced that these strategies have a reason to exist. They are my precious gold placer.

Editor: Then, can you take the traditional industry as an example and give us some specific instructions or useful admonitions on trading?

gong Wei: ok, when I was a child, the old man often told me: every penny is good, every meal is good, and people starve to death. How to understand this sentence? You must have a reasonable profit expectation before doing business. In trading, human greed will swell up, and most traders have unrealistic profit expectations.

My experience has given me the opportunity to meet many wealthy and smart traders. They hoped that the futures market would make them rich overnight, but in the end they all left the market full of opportunities empty-handed. Wang Shi, the president of Vanke, who made a lot of noise in the previous paragraph, also said: Vanke will not do more than 31% of the profits, because the average profit level of its international peers is also the same. Vanke knows how to give up unrealistic profit expectations and become bigger and stronger in the market through long-term operation. The profit of trading also comes from long-term and steady accumulation.

the profit expectation can also be understood by "waiting for the rabbit". Many traders have gained excess returns in the abnormal market in the past two years, waiting for a rabbit under the tree, so they expect to wait in the following market.