🧐Why do I say it is impossible to predict: "flash crashes," "complex systems," and inevitable results caused by random factors—continuing from the last article about randomness: I happened to see @Svwang1's post discussing the 2010 stock market crash: "Whether it's Wall Street or the crypto space

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15 hours ago

🧐Why do I say it's impossible to predict: "Flash Crashes," "Complex Systems," and the inevitable results caused by random factors—

Continuing from the previous discussion on randomness:

I happened to see @Svwang1's post about the 2010 stock market crash: "Whether on Wall Street or in the crypto space, the essence of a flash crash is not an accident, but a mirror cycle of systemic structure and human greed."

So you see: whether it’s the macro randomness of the "meteorite hitting the Earth" that led to the extinction of dinosaurs;

or the micro randomness of the 2010 Flash Crash caused by "high-frequency trading chain collapses,"

or the systemic chain reaction crash in the crypto space in 2011,

all indicate—

Human control over complex systems is limited.

Most events that seem significant are the inevitable results of random factors within highly complex, interacting systems:

A small disturbance (like a mistaken order, an algorithm bug) can trigger a massive chain reaction, and such events are unpredictable by humans—

  1. Market Complexity: The modern financial system (including the crypto space) has entered a stage of "machines and algorithms competing."

  2. Regulatory and Cognitive Imbalance: The public often realizes they are in a "black box" only after a crash.

  3. Human Cycles: Panic, speculation, and scapegoating—these patterns continuously replay in both traditional finance and the crypto market.

So, what is the greatest benefit of understanding the world's uncertainty?

It is your willingness to acknowledge the randomness of environmental changes, your willingness to believe in and understand "black swans," so you will not pursue perfect control, but only seek "adaptation."

This is a significant advancement:

Knowing that you do not know is the beginning of knowledge: because "I do not know" is the safest starting point.

Seek a stable rhythm in uncertainty, rather than fantasizing about eliminating risk.

Do not pursue absolute correctness, but find relative optimality in imperfect information.

For example, statistical arbitrage, portfolio investment, risk control strategies—all essentially seek "order in chaos."

The market and life are the same; fundamentally, they are both a practice of "seeking certainty in uncertainty."

The only thing we can do is "continuously iterate ourselves."

I still like a line from "Randomness":

"Only when we encounter things we cannot control can we truly experience this world."

Flash crashes, plummets, separations, reunions—

Every loss of control is the world reminding us:

To be alive is to be surrounded by uncertainty, a miracle.

I love this world because it is full of adventures!

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