Riding the wind of rebirth

The purpose of this is to encourage more traders to provide liquidity in the market, thereby increasing market trading activity and efficiency.

This is equivalent to operating this type of securities. For every transaction you make, the exchange will give you a certain amount of money, which is somewhat similar to the common traffic sharing method used by streaming media in later generations. If you trade more, the price difference will be quite considerable.

Another example is the prey algorithm, which targets liquidity providers in the market and treats their large orders as prey orders.

Often large orders cause short-term fluctuations in market prices, which provide profit opportunities for prey algorithms.

The algorithmic order prices of a stock often compete and chase each other at a very fast speed, causing the stock price to show a phased change trend from high to low and from low to high.

In actual transactions, small transactions of a limited number of 100 or 500 shares often occur, pushing up or down the stock price by a few cents to tens of cents.

Prey algorithms detect large orders by monitoring data sources such as market depth, order books, and transaction flow. These data sources can provide real-time market intelligence and help the algorithm identify potential prey.

Once a large order is detected, the prey algorithm will trade with it at a more favorable price. To put it simply, it uses a low-latency trading system and a high-speed trading connection to implement "order grabbing" so that it can trade in time before the large order causes market fluctuations. Then, through this artificially created obstacle, it will induce institutional investors to increase the buying price or lower the selling price, thereby locking in trading profits.

In addition, there is also an automatic market maker strategy, which uses a high-frequency order placement and cancellation strategy to lure investors to change their trading strategies, thereby capturing a large amount of potential, hidden order information.

As well as methods such as flash trading and dark pool trading, they are means of making profits by exploiting the short-term information gap between internal and external systems.

This is quantitative trading, the gray area of ​​the securities market.

The reason why it is called gray is that although its means are legal, its design concept violates the fairness of transactions. It uses technical means to obtain the information priority of "early knowledge, early decision-making, and early operation" and uses it to make profits.

In addition, from a technical perspective, this method has inflated a large number of transactions and interfered with the "authenticity" of the market, especially the automatic market maker strategy, which is suspected of manipulating the stock market through false orders.

The remaining flash trades and dark pool trades are snatching food from the mouths of the privileged class and infringing on their rights and interests.

Zhou Zhi directly crossed out the last two transactions from the system: "We won't do these two transactions. They will be banned sooner or later. There's no point in investing so much effort in research and development."

"No, even if it is banned in the future, we can still make a lot of money." Li Laosan expressed his dissatisfaction.

"Hehe..." Zhou Zhi said seriously, "We don't need to make the big guys hate us like this. The previous few moves are enough for us. Xiao Miao, how difficult do you think it will be to transplant this system to Xiao Zhi?"

"This is simple. It's mainly because their model is too weak." Mai Xiaomiao was already reading the code: "Brother San deliberately asked them to develop it in JAVA, right? Just to make it easier to transplant?"

"Xiao Miao is really smart." Li Laosan was quite proud: "And they also said that JAVA is indeed easy to use and deploy."

"Our biggest advantage lies in our low-latency trading system and high-speed trading connections," said Mai Xiaomiao. "So to maximize our advantages, we should focus on high-frequency trading."

"I think Third Brother has found a good project for us." At this point, Mai Xiaomiao turned to Zhou Zhi and said, "The structural system of the securities market is very consistent with the neuron model. It also constructs a nonlinear system by stacking many tiny linear features, isn't it?"

"Huh?" After Mai Xiaomiao pointed it out, Zhou Zhi realized that it was indeed somewhat similar. The neuron-like computing system itself is a system composed of a large number of computing units connected by a high-speed network. The system uses the algorithm to use the calculation results output by the previous level as the input of the next level. After layers of "ripple" calculations, it finally calculates a result with a high probability of accuracy.

This behavior also applies to the securities market. Every bull market or bear market, the manifestation of trading behavior is similar to an avalanche caused by a small snowflake. Both the time evolution and the scale evolution are very similar.

“Why haven’t we thought of this application direction before?”

Mai Xiaomiao didn't have such an idea: "Fortunately, Third Brother came a little late, otherwise there would be no computing power resources for the Navy uncle to use."

Zhou Zhi suddenly felt ashamed. He felt sorry for the computing power he had just given away in vain. His ideological awareness was not even as good as that of the "foreigner" Mai Xiaomiao.

"Don't worry about that." Li Laosan said, "If the system can be successfully transplanted and is effective, we will expand it!"

"Third brother, are you so optimistic about this system?" Zhou Zhi looked at Li Laosan with admiration again. He was sure that this system could bring huge profits because his later experience told him the power of quantitative trading in the securities market. However, Li Laosan's judgment was all based on his own experience and wisdom, and this guy was not even an expert in information technology, which was amazing.

"Have you studied the history of the Rothschild family's rise to fame?" Li Laosan asked Zhou Zhi.

"No." Zhou Zhi was very honest: "Mainly because they are not in the Twenty-Four Histories."

“Hahahaha…” Li Laosan was amused by Zhou Zhi’s joke: “During the Battle of Waterloo, Rothschild sent a large number of spies to the front of the battlefield to gather information. He learned the news of the victory of the war one day earlier than others, and then sold a large amount of stocks and bonds.”

"Because the stock price of England had been rising before, the sudden selling immediately triggered a chain of panic, and people began to follow Rothschild's large-scale selling."

“Rothschild began to buy stocks and bonds at the height of the panic.”

"By the next day, when the news of victory came back, Rothschild had already received a huge amount of bonds and stocks."

"With this one move, he increased the family assets by twenty times!" Li Laosan said with emotion: "What did you say, brother? Time is life! Information time difference is money!"

"Let's do it!" Zhou Zhi nodded vigorously: "After we finish eating this meal of dumplings, we will do it!"

The method of making shepherd's purse dumplings is not complicated. Just pick fresh shepherd's purse, wash it, blanch it in boiling water, take it out and squeeze out the water, then chop it and set aside.

Use a meat grinder to grind the meat filling, stir it with onion and ginger, add soy sauce, pepper, chicken essence, salt, sesame oil, and five-spice powder and mix well, pour in chopped shepherd's purse and mix well, then you can make dumplings.

There is another way, which is to stir-fry eggs with chopped shepherd's purse as the filling for dumplings, then use chopped green onion, white pepper, soy sauce, balsamic vinegar, sugar, chili oil, pepper oil, sesame oil, chicken essence, and chicken fir oil to make a sweet and sour sauce, and eat it with the light-flavored dumplings stuffed with eggs and shepherd's purse.

Mai Xiaomiao prefers another way of eating dumplings with different flavors outside, which is similar to the Zhong dumplings that people in Shudu like.

Zhou Zhi called it "the way children eat" in his heart, but he didn't dare to say it out loud. (End of this chapter)