What is the difference between traders and suckers? A summary of 27 investment principles.

Trading is like a mirror, reflecting the relationship between people and reality, exploring how to recognize one’s own strengths, calibrate worldviews, make decisions amidst uncertainty, and maintain humanity. This article is based on a piece written by thiccy, cofounder of scimitar capital, organized, compiled, and authored by BlockBeats. (Background summary: Tom Lee: The digital asset bubble may have burst, with the emergence of DAT companies and NAV falling below 1 as a warning signal) (Background information: BitMine buys the dip with 128,000 ETH! Tom Lee insists on a bullish outlook: the pullback is a healthy whipsaw, and the market has not undergone a structural change) Editor’s note: Trading is a mirror, reflecting the relationship between people and reality. This article superficially discusses how to survive in the market, but in reality, it explores a more universal life question: how to recognize one’s strengths, how to calibrate one’s understanding of the world, how to make decisions amidst uncertainty, and how to maintain humanity in a zero-sum game. The author states, “In a sense, everyone is a trader;” we all bet on the future with incomplete information, the only difference being the form of our chips. 1) Traders make money by guessing the flow of funds. 2) There are many ways to win in the guessing game: Some can quickly read new information, some can quickly make guesses, some can accurately process new information, some can quickly identify patterns, some can see patterns that others cannot, some can accurately interpret others' predictions, some have networks that can gossip about fund movements, and some can pursue funds that others cannot, do not want to, or do not know how to pursue. 3) Each skill is referred to as an “advantage” (edge); you can think of each skill as a stat in a game. 4) This game is winner-takes-all. If you want to continue making money, you need to fill your stat circles and cross the power law threshold. 5) Team hunting is easier. Combining everyone’s best skills can cross more thresholds. An excellent trading team is a positive-sum game. The whole is greater than the sum of its parts. 6) Trust is built through continuously upgraded tests of trust. It’s important to calibrate the scale of trust tests. Too large can lead to being taken advantage of, too small can hinder the compound interest growth of relationships. Generosity is very useful. Most people in trading feel lonely, so making this process enjoyable is a valuable skill. 7) If you want to win, you must be willing to sacrifice everything. Most people are not that eager for success, and that's okay. 8) Only play those games you can learn to win repetitively. Honestly calibrate your abilities and the real level of your capabilities in the world. Achieving a world-class level in any game requires intense focus, courage, and often a rare talent shaped from childhood. Most importantly, find games that fit your specific strengths. Playing a game that doesn’t suit you is the most common tragedy in this industry. Trading has consumed and spit out millions, wasting their golden years and scattering their stories in the wind. 9) The guessing game always becomes harder over time because it is an adaptive Darwinian system. People learn, knowledge spreads, advantages decay, winners grow, and losers die. 10) Adverse selection is everywhere. Always ask yourself why those who are smarter, better connected, or faster than you did not seize the opportunity before you. 11) Most market participants are just flipping coins with each other. Occasionally, someone will flip twenty heads in a row, appearing like a genius, and then trigger a wave of blind imitation. 12) Your best trades will succeed quickly and violently. 13) Trading will expose your deepest insecurities about yourself and the world. It’s a way to quickly realize the reality of your position in it. In a sense, everyone is a trader. We make calculated decisions with incomplete knowledge, manage drawdowns to avoid bankruptcy, and turn our natural advantages into returns. Almost everything boils down to calibrating your understanding of yourself with your understanding of the world. Many people underestimate their most powerful unique traits and take too little risk in building their lives around these traits. 14) Jealousy is the most intense emotion in the internet age. If handled well, it can allow you to quickly replicate effective things from the best people. If mishandled, it will generate scarcity-driven anxiety and burnout. 15) As trading time increases, you will realize that ultimately you need to find the demand to build the foundation of your identity on something stable. An identity built on talent or “niche viewpoints” will soon be challenged. An identity based on the thought process of problem-solving is more sustainable, even if it sacrifices novelty and excitement. 16) Only the paranoid survive. Panic earlier than others. Always have an exit plan. Avoid deep drawdowns. Stay humble and leave room for the unknown unknowns. Be aware of when you are selling tail risk. Maintain liquidity. Respect counterparty risk. Respect path dependence. 17) People often build artificial heavens around the goals they chase and artificial hells around the anxieties they escape. This framework can spark bursts of motivation, but it is not a sustainable way to live in the long term. Scarcity and anxiety distort decision-making, making you susceptible to ideological capture. 18) Trading is a zero-sum game within a larger positive-sum game. While every trade has a winner and a corresponding loser, the market as a whole allocates resources across space and time, helping civilization to develop. The emergence goals of complex systems are often only clear in hindsight. If you are too cynical about the futility of what you are doing, you will spiritually die in one blow and exhaust yourself. 19) It is hard to clearly observe the big picture. You are an individual ant trying to understand the behavior of the whole ant colony. Prices and price movements are low-dimensional projections of a massive machine. The market fluctuates for many reasons, but we simplify our views and compress them into a single concise story. 20) Money can change a lot, but not everything. When you understand what truly changes and what remains constant, you will experience the pain of growth. 21) Making a profit in trading means your view of the world is closer to reality than the average level of market funds. But seeing through the essence in one market does not mean you can see through it in another. The ability to transfer across markets is a higher-order skill: discovering and redeeming advantages, seeing adverse selection, and judging where the power law critical point lies. 22) People who trade for a living often age quickly. The mental stress is costly. Make a conscious effort to take care of yourself. Without health, money doesn’t mean much. 23) Winning streaks often mask the bad habits that will backfire over time. Losing streaks will make you question the entire process. Don’t get excited at peaks, and don’t get disheartened at troughs. 24) The world is in a constant state of decay. Reality is constantly changing, and everyone’s models will become outdated and inaccurate. That’s why there is always space for young people, those eager for success, and those who are obsessed to make money. People are like the moving averages of their lives. Short windows first capture new trends, even if the part they capture is noise. 25) The market trains you to discover self-reinforcing and self-correcting cycles in what you see. 26) Most excess opportunities in modern markets ultimately stem from people trying to fill the void of meaning in life. 27) I am grateful to play this game with friends and be rewarded for it. Life is really beautiful. Related reports: The bottom line for Ethereum is $4,200! Tom L…