Four Key Traits of Excellent Traders

Over the past five years, through in-depth research of hundreds of fund teams, a seasoned FOF investor has summarized four core elements of successful trading. This investment expert, with years of experience in family offices, has been engaged in asset allocation work in a technology-focused family office for many years, and his interest in the cryptocurrency field began during the bull market of 2020.

Three Key Factors for Choosing Quality Funds

When evaluating funds and general partners, this expert mainly focuses on three aspects: performance, team, and strategy.

Performance Evaluation

In the cryptocurrency secondary market, information transparency is often lacking, making the authenticity, sustainability, and attribution analysis of past performance especially important. The key lies in identifying which past performances can indicate future results.

team consideration

Team evaluations include factors such as background, reliability, and communication skills, mainly divided into three points:

1. Integrity is crucial. Whether in self-operated trading or asset management, honesty and discipline must be maintained.

2. Hands-on involvement is essential. Excellent trading teams typically remain lean, with no more than five core members, and the leader must personally participate in trading.

3. Have a global perspective and the ability to evolve continuously. In the face of structural changes, founders need to have the courage to make adjustments and execute them firmly.

Strategy Evaluation

Strategies need to align with current market demands and industry development trends. Although there is a significant gap between the cryptocurrency secondary market and the traditional secondary market, this also represents a huge opportunity.

Four Ways to Continuous Improvement

1. Maintain communication with the market, but have your own opinions and do not follow the crowd.

2. Cultivate a higher-dimensional perspective to understand market dynamics from a global viewpoint.

3. Develop "Street Smart" skills, gain a deep understanding of the essence of the market, and create excess returns.

4. Learn from the excellent, seek high-dimensional guidance, and break through development bottlenecks.

How Institutions Allocate Crypto Assets

Institutional strategies for allocating cryptocurrency assets vary based on the characteristics and preferences of the funds. This expert personally leans towards secondary market investments, categorizing them into four types:

1. Mining and Long-term Holding
2. Technical trading, including quantitative strategies
3. Trading based on subjective judgment and "value"
4. DeFi investment, with a greater emphasis on product logic.

Strategies that performed well in the current cycle

1. Currency-based Enhancement Strategy

   • TVL games and staking to earn airdrops
   • Quantitative Trading

2. Purchase BTC at a discount or participate in mining

3. A phased strategy that outperforms BTC, such as CTA (Trend Following)

Among them, cryptocurrency quantitative trading is considered one of the most attractive asset classes due to its good liquidity, large scale capacity, and controllable risks.

Recommended Reading

To enhance trading skills and market insights, this expert recommends the following readings:

1. "Principles of Professional Speculation": A systematic explanation of the trading system
2. Books related to central bank history and monetary policy, such as "The Alchemist"
3. Literary works that explore human nature, such as Chinese Ming and Qing novels and French short stories.

These books help to understand the technical and human aspects of financial markets, providing profound insights for dealing with complex interests.