Rebirth of the Capital Legend

Chapter 259 An opportunity to counterattack the bulls!
"Haha, the trend of the British pound exchange rate in recent trading days is really refreshing!"

As the investment sentiment in the domestic and foreign pound exchange rate markets tilted towards the bullish direction and the entire market had formed a bullish squeeze, on June 6, during the Asian trading session, in Hong Kong, as a company that had earned tens of millions of dollars in floating profits from investing in the pound exchange rate market, Gu Chijiang, the company's founder and main fund manager, Tianhe Capital, said excitedly.

"The trend of the pound exchange rate in the past few days has indeed been quite smooth." Xie Hongxing, the manager of the company's trading team, responded, "Looking at this situation, the bulls have achieved a comprehensive victory in the pound exchange rate market. Once the 1.5300 point barrier is broken, the pound exchange rate should form a sharper unilateral upward trend in the future."

"The key is that the Bank of England is also conducting market operations now." Gu Chijiang said, "It's really a good time for heaven and earth to work together. Now it's too late for Huayi Capital, the main short position in the market, to withdraw, right? As long as the pound exchange rate breaks through the 1.5000 mark, we will probably see the main hedge fund Huayi Chengyuan No. 1 under Huayi Capital completely defeated and liquidated its positions. It's not impossible that it will even be forced to liquidate its positions."

Xie Hongxing nodded slightly and said, "This Mr. Su from Huayi Capital single-handedly shorted the pound exchange rate and provoked a long-short war between various global capitals in the pound exchange rate market. He really overestimated his own abilities. Now he has ended up like this, and it is purely his own fault."

"You are still too young." Gu Chijiang shook his head. "You think that if you can dominate the A-share market, you can get benefits in the international financial market. But you never thought that compared with the huge foreign exchange financial market, the domestic A-share market is basically a novice village."

"Looking at Mr. Su from Huayi Capital, his operation on the pound exchange rate this time..." Xie Hongxing said, "It's really hard to believe that he was able to achieve a hundredfold investment performance in the second half of the year in the domestic A-share market. It's also hard to believe that he was able to raise so much capital and funds."

Gu Chijiang smiled and said: "The domestic financial circle always likes to create gods."

"That's right." Xie Hongxing nodded. "Before this Mr. Su, there was Mr. Xu from Zexi Investment, who was also praised to the sky by a group of people in the domestic financial circle. But what happened? Mr. Xu's famous skill in the A-share market for many years was nothing more than relying on the advantage of information channels to continuously engage in insider trading."

"When I first heard that Mr. Su from Huayi Capital had raised 200 billion yuan in fund products in one day after opening his new company, I was a little shocked." Gu Chijiang said, "I was curious and admired Mr. Su, and I was thinking about when to arrange a private dinner to meet each other.

Now it seems... it's no longer necessary.

Judging from Mr. Su’s operations in the British pound exchange rate market, it seems that his previous investment performance was more like luck.

After all, judging from his operations in the pound exchange rate market this time, whether it is risk control, position progression, or leverage selection, there are huge problems. If you think about it carefully... he doesn’t look like a mature trader. "

"This person's previous investment record must have been luck." Xie Hongxing said, "I don't know where this person got his confidence from. He clearly made money by luck and his trading skills are very average, but he insisted on abandoning the A-share market in the Novice Village and investing all his wealth in the hugely risky foreign exchange financial market?"

Gu Chijiang smiled and said, "Maybe this Mr. Su really mistook luck for strength."

"In this financial market, money earned by luck will eventually be lost by strength," Xie Hongxing said. "From this perspective, Mr. Su is very honest and perfectly illustrates this point."

"Haha..." Gu Chijiang laughed, "It's true. You lose money based on your strength."

Xie Hongxing nodded, paused, and then continued: "In a way, this Mr. Su is really a kind man. In this round of unilateral upward movement of the pound exchange rate, many long-term institutions in the market have earned huge profits from the short positions held by Mr. Su."

"The entire market is now waiting for Mr. Su to blow up his positions, or to close his positions on a large scale and admit his losses," said Gu Chijiang. "Before Mr. Su withdraws his positions, it is estimated that the long groups in the market will continue to force shorts and continue to drive the pound exchange rate up."

"There is no doubt about it." Xie Hongxing said.

"Has there been any unusual news in the UK recently?" Gu Chijiang asked.

Xie Hongxing responded: “Except for the news about the Bank of England conducting open market operations, there seems to be no obvious negative or positive news.

"Okay." Gu Chijiang nodded. "Although most of the news is neutral, as long as Huayi Capital still holds a large number of short positions, we don't have to worry too much about the trend of the pound exchange rate."

"Yes." Xie Hongxing nodded and said, "Mr. Gu, the floating profit of our foreign exchange investment fund has reached nearly 1000 million US dollars. I am wondering... at this point, should we stop profit on some of our positions and make more preparations for the future."

"No need." Gu Chijiang said firmly, "The sentiment and expectations in the pound exchange rate market are still accelerating in the bullish direction, and according to the long and short positions, the most aggressive short squeeze trend of the bulls has not yet arrived, and the time for our fund to reap huge profits has not yet arrived. At this time... why should we prepare to reduce positions and stop profits? Shouldn't the correct operating mode be to continue to use profits to increase positions and go long under the relatively certain expectations?"

"Continue to increase positions and go long?" Xie Hongxing was a little surprised when he heard Gu Chijiang's words, and said, "Boss Gu, if we continue to increase positions and go long at this position, we won't have much cost advantage."

"Don't worry about cost advantages or anything like that," Gu Chijiang said. "Just follow market sentiment and expectations."

"Okay...okay!" Xie Hongxing hesitated for a moment and nodded.

Although he felt in his heart that it was a little inappropriate to continue increasing his long positions at this point, at the same time, he felt that Gu Chijiang was right.

Under the current situation.

It can be said that the short-selling institutions led by "Huayi Capital" no longer have any ability to reverse the market trend and avoid being continuously squeezed out by the bulls.

That is to say...

There is a high probability that the subsequent trend of the pound sterling exchange rate will accelerate upward and hit the higher levels of 1.4000 and 1.5000.

And since the pound sterling exchange rate is likely to rise.

At the same time, it is also highly likely that the big short-selling institution "Hua Yi Capital" will be forced to cut its positions and stop losses, or even face a margin call.

Therefore, the profit and loss ratio of intervening in the market and continuing to go long at this time is still very favorable.

In this case, there is really no need to reduce positions and take profits when you have huge profits and expectations and emotions are continuing to ferment in the direction of your positions.

"Such a unilateral squeeze on the pound exchange rate market is not common in the foreign exchange market." Gu Chijiang said with a smile, "Since we have seized such an opportunity, we must make full use of it and maximize the market profits. We cannot blindly emphasize the risks in small-risk operations, nor can we ignore the existence of risks in high-risk operations."

"Okay, Mr. Gu." Xie Hongxing nodded quickly.

Then he turned around and directed the traders in the trading room to continue increasing their positions in accordance with Gu Chijiang's overall strategic direction.

At a time when the main fund products under Tianhe Capital further increased their long positions in the British pound exchange rate at a high level.

Also in Hong Kong, inside the Aberdeen Asset Management company, in the trading room of the Aberdeen Asset Management Evolution 1 hedge fund, Frederick, the manager of this main hedge fund, stared at the pound exchange rate that had broken through 1.5300 points, and looked at the main control computer, which showed that the fund's short position on the pound exchange rate had already lost tens of millions of dollars, and his brows were obviously furrowed.

"Teacher, do we need to reduce our positions and stop losses?"

Noticing Frederick's frown, Dennis, the core trader and head of the trading team, asked.

"Reduce positions to stop losses?" Frederick was stunned and replied, "Dennis, you are wrong. Our correct trading operation at the moment should not be to reduce positions to stop losses, but to continue to increase short positions."

"Continue to increase short positions?" Dennis didn't quite understand.

Frederick said: "Yes, continue to increase short positions. On the market, the tighter the longs squeeze, the more it shows that the long market is coming to an end. What's more, I learned from my colleagues in London last night that the British people are currently very divided on whether to leave the EU or not. This fully shows that the result of the "referendum" on June 6 is full of uncertainty, and there will be no surprises as claimed by major global institutions.

A future event that is full of uncertainty and has huge impact.

The impact on the current trend of the pound sterling exchange rate will definitely become greater and greater.

I have a feeling that the truly smart funds in the market will not turn a blind eye to this uncertain event.

Furthermore, the net long position of bulls has now jumped to nearly 50 lots.

In this situation, with many short-term long positions constantly under pressure to take profits and close their positions, it is already difficult to continue to push up the pound exchange rate and continue to force a short squeeze without the stimulation of major positive news.

Because as long as the institution "Huayi Capital" can hold on, it can avoid passive liquidation by continuously replenishing margin.

Therefore, there are not too many short sellers actively cutting their positions and leaving the market, and there are not enough short positions to cover.

A lot of short-term active funds in the market have no motivation to continue holding positions, which means... next, while short positions are sharply reduced, profitable long positions will also be sharply reduced.

In the financial market...

Bulls and bears are like twins, like light and dark.

When one side completely overwhelms the other, it means that the motivation to continue to squeeze out or squeeze out has disappeared, which means that the long and short pattern is about to reverse.

Although there is still some time until the referendum date of June 6.

However, it is likely to be difficult for the pound sterling exchange rate to continue to rise and quickly rise above the 1.5500 mark.

Therefore, whether judging from the transaction logic or the logic of event development.

The profit and loss ratio of shorting here is much higher than that of longing, or stop loss closing. If this is the case... then why don't we operate in the right direction and continue to increase our short positions? "

"What the teacher said... seems to make some sense." Dennis pondered for a while and responded.

Frederick smiled and said, "I just frowned because I felt that the various institutions that were shorting the market seemed to have fallen into a misconception in their judgment of the situation. I felt it was a pity, but it was also because of this that we had such a good opportunity and position to short."

After saying that, Frederick continued to let the traders increase their short positions on the market according to the plan.

And just when he issued the corresponding transaction instructions.

Outside the trading room, his secretary assistant Adrian suddenly walked in and reported to him: "Mr. Frederick, Mr. Su from Huayi Capital wants to invite you to have dinner together this afternoon. What do you think..."

"Mr. Su from Huayi Capital?" Frederick turned around and glanced at his assistant, obviously a little surprised.

Assistant Adrian nodded and said, "Mr. Su's secretary contacted me by phone and asked me to convey Mr. Su's greetings to you."

Frederick carefully considered the purpose of Su Yi's appointment with him, pondered for a while, and then responded: "Okay, it's okay to meet this person."

Seeing that Frederick agreed, Adrian hurried out again and replied to the other party.

"Teacher, do you know why Mr. Su asked you to meet him?" Dennis asked.

Frederick nodded slightly and said, "I can roughly guess one or two things. It seems that Mr. Su is indeed quite capable. He has a huge amount of short orders at this time. He is forced to this point by the short sellers in the market. Not only did he not lose his composure and irrationally reduce his positions and stop losses, but he seems to have found an opportunity to fight back against the long sellers."

"This guy is indeed not to be underestimated." Dennis said, "But he probably doesn't have much money at his disposal, and the chips he can use to leverage the market and fight back against the bulls, right?"

"That's hard to guess." Frederick smiled and said.

Afterwards, all the traders in the trading room carried out transactions step by step, gradually increasing their short positions as planned.

5:30 p.m.

Frederick, accompanied by his assistant Adrian, came to the place agreed with Su Yi.

The other party found a Western restaurant with a nice environment. The restaurant's decoration style and dishes were more in line with his taste, which showed that the other party had collected and understood his preferences before.

"Hello, Mr. Frederick." Seeing Frederick coming, Su Yi stood up with a smile in the restaurant's private room and took the initiative to extend his hand to greet him. "In foreign exchange trading, your performance in the Swiss Franc Black Swan last year really impressed me. Now I finally meet you, I am very happy."

(End of this chapter)