1, there is a cliff-like gap in funds. Unless you are a super retail investor, your funds are as small as a hair in the whole market, and institutions can use positions as small as tens of millions to tens of billions to achieve the expected strategy.
2. The gap between scale and quantity. There may be dozens of institutions with large capital to 100, but the number of retail investors can be hundreds of millions. However, although individual retail investors have little funds, when people adopt similar trading strategies (such as chasing high), institutions may be overwhelmed by their kinetic energy.
3. Use different tools. Retail investors basically buy more, waiting to rise and profit from the price difference; Others make profits by shorting securities or stock index futures. This kind of transaction is not common because of the high threshold and inconvenient operation, and most people also lose money. A few institutions use the intraday trading (T+0) of stock index futures, financing, securities lending and ETF, and there are also OTC options and equity swaps that many people don't know.
4. The response to risk is different. Because there are few tools, you have to take risks, so you can make a profit. Institutions, especially large and sophisticated brokers, generally do not tolerate risks or have low tolerance for risks. Once risks are exposed, whether subjective or accidental, they should be washed away immediately. The effect of hedging is that the overall profit and loss of the position has nothing to do with the rise and fall of the market or index. In short, everyone should make money.
Many retail investors trade with their hearts, not their brains. Adversity will distort their judgment of the market. This is why you should make a plan, and then you must stick to it. It is very necessary to preset risks. We should settle the losses as soon as possible and try our best to make full use of the surplus.