Of course, when I say making money here, I mean "long-term sustained profit", not "short-term relying on leverage to get rich overnight". Because experienced investors will know that behind the myth of short-term overnight wealth, there is generally the risk of "short-term overnight loss". For example, the price of crude oil has plummeted recently, and we have seen some international investors explode huge losses overnight.
If the scale is too small to make money, it may make sense in some niche collectible markets, but relative to the scale, the global commodity and foreign exchange markets are not too small (even large), so why are it so difficult to make money from commodity and foreign exchange transactions?
First of all, foreign exchange and commodity markets are global and monotonous. The variety here is rather monotonous, which refers to such a situation: for example, there is only one exchange rate between RMB and USD, while there are three or four thousand stocks in the A-share market, one or two thousand in Hong Kong, and several thousand in addition to various funds. This global and variety monotonicity means that the price factors of commodities and foreign exchange are global rather than regional, and global investors can only analyze a few prices after obtaining these price factors.
For investors, the easy source of long-term high returns is to find a thinking advantage in one direction. This thinking advantage can be reflected in many aspects, such as a deeper understanding of a niche industry, a deep excavation of a neglected stock, and more frequent observation of the discount rate of marginalized closed-end funds.
For stocks, the operational factors are more regional in many cases. Investors may substitute some factors, such as wider knowledge, more experience and more research, so they know more about an industry and several companies, while other investors don't know so much. The richness of products also leads to this dominant thinking, and it is easier to find investment products that are ignored by the market.
However, for a global and monotonous market, it is difficult for investors to find a thinking advantage. Finding the brainless advantage means that investors are more likely to surpass their competitors. At the same time, compared with the stock market, the participants in the foreign exchange and commodity markets are more professional, and the number of non-professional investors is less, which also means that it is easier to obtain excess returns from other investors. The essence of long-term investment performance comes from the excess income earned from opponents.
Among them, the fundamental changes in commodities and foreign exchange are generally rich in the long run. You can find this huge gap by comparing the exchange rate changes between the US dollar and the US dollar in China and the price changes of A-share value stocks in the past 10 years. So investors can only chase the short-term price fluctuations of these targets. And we know that chasing short-term price fluctuations is an unreliable thing.
For stock and equity investors who pursue long-term returns, the analytical factors they rely on, such as brand advantage (such as high-end consumer goods), economic scale effect (such as large automobile companies), natural monopoly (such as airports) and network effect (such as Microsoft office system), are all factors that can be closed for a long time. This means that you can make money for many years as long as you find one factor.
But what about foreign exchange and commodity traders? They often analyze fluctuating factors, such as inventory, foreign trade strength, short-term geopolitical changes, weather factors, short-term economic cycle demand and so on. These factors are short-term and difficult to capture, and they all need to be traded in the day and difficult to hold for a long time. However, intraday trading means that mistakes may occur frequently and it is difficult to hold them for a long time, which means that trial and error is needed.
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