Regarding the legends of exorbitant profits in the market, as a seasoned trader with over a decade of experience, I too am fascinated by them and enjoy studying their trading operations and psychological states during transactions. These individuals seem godlike to us; sometimes when trading becomes tiring, I look up to them, feeling that even a fraction of their profits could transform me and lead me to the pinnacle of life.

However, such legends are exceedingly rare, and as ordinary people, it is difficult for us to replicate their success one-to-one. Yet, certain qualities they possess are well worth our emulation and learning. Today, I will share three traders who have made a significant impression on me, each having made a fortune in history. I will discuss their trading experiences, the processes of their operations, and analyze their commonalities for your reference.

After reading, you will understand why the path to enormous profits is tread by so few, as there is always something unattainable behind these individuals.

1. Michael Burry, the Protagonist in "The Big Short"

The movie "The Big Short" is very popular among traders as it is adapted from real events on Wall Street, detailing how several legendary traders sensed the impending crisis of the housing bubble before the 2008 financial crisis, shorted subprime mortgages, and reaped substantial windfall profits. These geniuses became one of the few profit-makers amidst the financial disaster.

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Since the story of the film is based on real events, the Wall Street traders in the movie have real-life counterparts. The film won the Best Adapted Screenplay award at the 88th Academy Awards in 2016.

What left the deepest impression on me was the fund manager, Burry, who traded Credit Default Swaps (CDS) before the real estate crash. Although he firmly believed that the housing bubble would eventually burst, the real estate market was at its peak just before the collapse. His managed fund had to pay $80 million in margin annually. Faced with client skepticism and demands to redeem the fund, seeing his efforts and persistence about to be in vain, he stubbornly froze the fund, not allowing anyone to redeem it. At that time, he became a pioneer going against the tide.

In the movie, he is shown wearing headphones, sitting alone in his office with the music turned up to the maximum volume. That scene is unforgettable. He was so lonely, yet so resolute and confident. The office isolated his body from the outside world, and the music in his headphones completely isolated his mental world from the outside as well.In 2007, Barry's fund successfully bet against the market, achieving an astonishing return rate of 167% that year, earning investors over $700 million in returns.

The image above shows Michael Burry himself on the left, and the actor Christian Bale, who portrayed Burry in the film, on the right.

2. Fu Haiyang made a profit of 120 million from a principal of 6 million in cotton futures long positions

The story of windfall profits in the domestic futures market is always inseparable from Fu Haiyang.

He is a trader of farmer origin who has achieved the results of a top trader. Among them, the cotton long position trade from 6 million to 120 million is his experience of becoming famous in one battle.

The whole process of the trade is as follows: In the early stage, he accidentally obtained information that the area of cotton planting in rural areas had decreased by 40-50%, so he began to go to various cotton producing areas for field investigation, including the cotton producing areas of Shandong and Hebei.

He determined that the cotton production would decrease, and at the same time analyzed the basic situation of cotton import and export, thereby determining that the price of cotton would rise sharply in the future. At that time, the price was around 13,000, and his expectation was 25,000, or even higher.

In fact, the entire cotton long position trade lasted for more than a year.

Starting from May 2009, when the price of the cotton 0909 contract was at 13,000 yuan per ton, he began to build a position of 500 hands.

During the period, the price of cotton experienced several ups and downs, and did not rise sharply. The profit and loss of the account also alternated, until September 2010, when the cotton futures officially started the acceleration mode of the long position, and he also had several operations of closing and opening positions.Until November 3, 2010, he closed his positions when the cotton price reached 29,600 yuan per ton, at which point his account's funds amounted to 120 million yuan, with cotton futures soaring to over 30,000 yuan at their peak.

As everyone can see from the chart, he started to get involved in the long side of cotton futures in May 2009, and by the end of 2009, the market was in a slow and steady climb phase, with his account growing to a profit of 13 million yuan; he did not stop there.

Afterward, the market fluctuated, and his funds retreated to 8 million yuan. For a long time, the price of cotton futures remained in a state of oscillation and hesitation until September 2010, when the market finally began to正式启动多头 (this part seems to be cut off and does not make sense in English, so it is not translated).

From May 2009 to the end of November 2010, over the course of a year and a half, he maintained strong confidence and execution, ultimately achieving astonishing results.

3. Japanese Stock God, "Ko Teikawa," Earns 2 Billion Yen in 16 Minutes

Ko Teikawa has many titles in Japan's financial world, such as "Divine Move" and "Japanese Stock God." He is very low-key, having only accepted one interview before gradually disappearing from the public eye.

It is said that in 8 years, he turned 1.6 million yen into 17 billion yen in the stock market, achieving a return on investment of tens of thousands of times. What brought him into the public eye was his experience of quickly earning 2 billion yen in the J-COM incident in the Japanese stock market.

On December 18, 2005, a staff member at Mizuho Securities in Japan made a mistake while selling stocks on behalf of a client. The client's request was to sell one share of J-COM stock at a price of 610,000 yen, but the staff member, through carelessness, sold 610,000 shares at a price of 1 yen each. Since this stock had not been listed for long and there were not many circulating shares, such a massive sale directly drove the J-COM stock to a low point.

This incident also led to a major crash in the Japanese stock market, with the Nikkei index falling from 15,484 points to 15,183 points.

At this time, Ko Teikawa, within 16 minutes, placed a large number of orders on the limit down board and bought 7,100 shares of J-COM stock. That day, Mizuho Securities, in order to stop the loss in time, also bought a large amount, urgently raising the stock price to 772,000 yen.Takashi Kobayakawa sold 1,100 shares at a price of 7.72 million yen, and the remaining 6,000 shares were forcibly liquidated by the Tokyo Stock Exchange at a price of 9.12 million yen.

This operation earned Takashi Kobayakawa a profit of 2 billion yen (equivalent to approximately 977.6 million yuan).

It is said that he is a person who leads an extremely simple life and is highly disciplined. Even after achieving financial freedom, he does not indulge himself, enjoys eating instant noodles, does not buy luxury goods, and likes to play Nintendo game consoles.

In 2008, a Japanese media outlet produced a documentary about him, and after the documentary was aired, he disappeared from the internet and no longer accepted any interviews.

The following photo is of Takashi Kobayakawa himself, who looks very young.

There are many such wealth myths of high-profit traders in the financial market, and each person's experience will make us applaud and envy. Next, I will summarize some common points among them to see if there are any lessons that we ordinary traders can learn from.

4. Common points of high-profit traders

1: Their trades are accompanied by huge risks.

All high-profit trades undoubtedly come with heavy positions and high risks.

The CDS product operated by Michael Burry is a type of bet contract, which pays a margin to the insurance company, betting on the collapse of the real estate market.He began purchasing Credit Default Swaps (CDS) in 2005, but the actual bursting of the U.S. real estate bubble occurred at the end of 2007. During that period, the real estate market was booming, and many people thought Barry was crazy.

The Sain Capital fund he managed, with a size of $600 million, had to pay an annual premium of $80 million to top-tier investment banks such as Goldman Sachs, Bear Stearns, and Morgan Stanley. The fund he managed experienced a severe shrinkage of assets at one point.

When Fu Hai Tang started building a position in cotton futures in May 2009, he bought 500 contracts of cotton futures, and the position exceeded more than half of his portfolio. During the trading process, the fluctuations in profits and losses were very large.

By the end of 2009, the account's capital reached 13 million, and in January 2010, it retreated to 8 million, a difference of 5 million, which is not a small risk. Moreover, the operation of buying at high positions and adding positions after the market rose later was accompanied by huge risks. Ordinary people might not be able to bear it at all, nor dare to bear it.

2: They are brave in controlling risks and confident in persisting.

Traders who make huge profits all have a strong heart. Their operations are like dancing on the tip of a knife, and every transaction makes people's hearts pound, as if life and death are in a moment, but they can always get out of danger and reach success by licking blood on the edge of the knife.

We cannot empathize with their state of mind at that time, but being able to maintain their execution under such great pressure is a strong determination, and the character must be very tenacious to achieve this.

When Fu Hai Tang started buying cotton with 6 million, this 6 million was all his wealth, all the profits from his previous garlic electronic disk trading, but he did not hesitate to put it all in, and still ensured his execution did not deform under such great pressure, which is admirable.

You must know that the market has doubled from 6 million to 13 million, which is already a very large profit, and many people at this time must be thinking about cashing in immediately.

But he did not stop because of this, because before starting the transaction, his goal was that cotton would rise to 25,000 yuan. He did not affect his judgment because of short-term gains, nor did he affect his mentality because of uncertainty. He continued to charge under pressure until he reached his goal, which is what kind of determination!This near-mad confidence and obsession with trading targets are ingrained in the very bones of these "profiteering traders."

3: These traders are adept at in-depth research, seeking evidence to target opportunities with high certainty.

The trades of these profiteering traders are accompanied by enormous risks, and these individuals possess strong risk control and a nearly paranoid confidence and execution, but their control and confidence are by no means blind; they are well-founded.

Because all of their trades are opportunities with high accuracy.

Before trading CDS, Michael Barry reviewed the subprime loan materials and found that many loan customers were "three-nothing" individuals, with no jobs, no income, no assets, and they were buying houses with zero down payment, and yet these loans, packaged into MBS, were rated as AAA.

Such a glaring loophole was overlooked by the top investment banks on Wall Street. Although Barry's trade was indeed high-risk, it had strong certainty, and once successful, it would yield returns of dozens or even hundreds of times.

Fu Hai Tang conducted thorough research on the cotton production areas, discovering the reality of reduced cotton output and the disruption of supply and demand balance. The rise in cotton futures was a certainty, it was just a matter of when to initiate the long position, and he also went through a long wait before achieving significant results.

The certainty of Kobayakawa Takashi's operation was even higher; it was a mistake made by the securities company, a loophole that was seized and tightly grasped by Kobayakawa Takashi.

We must ponder, why was Kobayakawa Takashi able to instantly target this opportunity, why didn't others catch this obvious loophole? This was certainly not by chance, nor luck, but rather the result of constant vigilance and research, like a leopard waiting for the right moment to pounce, to seize the prey within the shortest time window.

So, everything is not obtained out of thin air. These traders who can achieve windfall profits, in addition to having strong mental fortitude, also possess the ability to conduct in-depth research and investigation, as well as a resolute and decisive character, coupled with a bit of opportunity, the right timing and favorable conditions, which together create these myths.5. Can we replicate the myth of these windfall profits?

When I first started trading, I reviewed Fu Hai Tang's trading process and felt that if I encountered such opportunities, I could achieve the same windfall results as him.

But after so many years of trading, it seems that I only have a god's perspective, and reality is entirely different. I have to admit my mediocrity because I cannot withstand such great pressure to do this.

Because it is too difficult to achieve the following points:

1: You need to have the ability to conduct in-depth research and can discover trading opportunities with high certainty.

2: Have the patience to wait for opportunities to arise.

3: When the opportunity arises, you have to bet your life savings and trade heavily or even fully.

4: When there is a huge risk in the trade, you have to withstand the pressure alone.

5: When there is a profit, you have to resist the urge to take the money and stop until you reach your goal.

Any of these points, as an ordinary person, is very difficult to achieve completely. Windfall traders are like the suicide squad on the battlefield, determined to achieve their goals, and if they don't succeed, they will die.Let's all reflect on our own trading practices. Not to mention going all-in like they did, but even a regular, light-position trade can be challenging to strictly follow through with the trading plan. It's hard to hold onto a winning position, let alone deal with such immense pressure.

Everyone always wants to make a quick fortune, yet they are unwilling to take on the huge risks and pressures that come with it. It's like wanting to buy something without paying for it—how is that possible?

So, if we can't become trading gods, let's be ordinary traders. We take on limited risks and earn limited profits. Simply and steadily earning the money we can make, gradually accumulating wealth, is also a successful trading path, don't you think?