jakiro
Many people have been struggling in traditional financial markets or crypto markets for a long time, but they still have not overcome the ingrained deterministic thinking in their minds, and have been unable to establish probabilistic thinking.
Indeed, in the macroscopic physical world and in our daily lives, almost everything is deterministic.If the cup is on the table, it’s not on the floor or in the kitchen sink at the same time.If the light is on, it will not be off at the same time, nor will it be on and off at the same time.If the wall is hard, it cannot be penetrated, and the boundaries are clear and distinct.All kinds of things.
But in the microscopic world, this is not the case at all.Just like atoms, modern people know that they are composed of a nucleus and electrons outside the nucleus.But maybe the atoms in your imagination look like the picture below:
But in fact, the whereabouts of electrons are so uncertain that they exist in the extranuclear space similar to a “cloud”:
That is, at a certain moment, the electron is both here and there, and there are different probability densities (that is, the probability of finding the electron) at different locations.The root of this probability is the famous wave function.
The financial market is actually closer to this microscopic world full of probabilities, but is very different from the deterministic macroworld.
For example, BTC’s closing price at 18:00 yesterday was 91.3k.People with a deterministic worldview would say that the price of BTC at that moment was 91.3k.People with a probabilistic world view will say that at that moment, BTC can be at any price around 91.3k, it can be 80k, 70k, or 100k, 110k, but the probability of occurrence of different prices is different.
Maybe it’s not easy to understand in this way, but it’s easier to understand in another way: that is to say, at any time in the market, there are BTC at any price, but the probability of BTC appearing at different prices is different.
Therefore, the so-called price of BTC at 18:00 you see is 91.3k, which is just an “illusion”.That is just the history of the handicap that has just been traded.History is the past, not the present.
People who cannot switch to probabilistic thinking will always imagine the probability of an electron appearing as an electron running very fast and being discovered by you by chance.
This is not the case at all.Electrons, including other microscopic particles such as light, exist probabilistically everywhere in this space at the same time.
A famous experiment to verify this is the double-slit interference experiment.
When light passes through two narrow slits, interference fringes are projected on the screen behind it.
The same goes for electronics.
This was initially understood to mean that a large number of photons or electrons interacted with each other after passing through two slits respectively, resulting in an interference phenomenon.
But something weird happens: when we control the emitter, we only emit one photon or one electron at a time, ensuring that it passes through the double slits and hits the screen before emitting the next one.This makes it impossible for particles in the front and rear feet to interact with each other.Then, scientists discovered that interference fringes still appeared!
Scientists are crazy.
Can each photon or electron know or predict the trajectory of the photon or electron before or after it, and thus interfere with them across time and space?
Later scientists discovered that this was not the case.
The real situation is even crazier: each photon or each electron is an interaction between itself and itself, an interference between itself and itself.
In other words, every photon or electron passes through both a slit on the left and a slit on the right, causing the self passing through the left slit and the self passing through the right slit to interfere with each other, resulting in an interference phenomenon.
It is as if a BTC buy order of 91.3k and a BTC sell order of 91.3k interact with each other to form a transaction and form a displayed price.
Scientists discovered that if they tried to install observation tools next to the double slits, they could observe which slit the photons or electrons went through.Then, microscopic particles no longer pass through two slits at the same time.The interference fringes also magically disappeared!
This is called the collapse of the wave function.
The moment you observe it, BTC immediately no longer exists in the form of a probability wave at any possible price, but instantly collapses into a deterministic price.
In fact, the point of what scientists call observation is not that people see it, but that they use instruments and means to detect information about microscopic particles, which inevitably interacts with microscopic particles.It is the interaction between instruments and microscopic particles that destroys the original wave function existence state of microscopic particles.
If you open a long or short order at a certain price, then when the price probability wave function moves near your opening position, there is a high chance that it will be “observed” by you – you will be liquidated.
And if you firmly hold the spot and do not trade, then the probability wave function will not interact with you, and it will not collapse into certainty.
If you truly understand that BTC in the secondary market is always a cloud of probability, then you will no longer be obsessed with asking what price it will rise to or what price it will fall to. There is no problem with such certainty.Because certainty simply does not exist.Your question itself is wrong.
When you thoroughly understand the existence of probability clouds, you can even use probability to make money.
