The Double Dilemma of Top Short-Term Genius Traders

Today I want to talk about the dilemmas faced by top short-term traders. Why bring up this topic? Just yesterday, a fan reached out to me and chatted with me for a long time, expressing strong agreement with my views. They don’t like short-term trading much, thinking it’s just gambling.

Then I shared some of my own opinions. Below, I’ll explain in a few points why I’ve been in the industry for 7-8 years, and every year, many excellent short-term traders emerge who can make hundreds of millions of dollars, but there’s never been one who can transcend cycles and achieve larger scale. The main reason for this.

First point: short-term trading is a game of chance. When you lose, I win. It’s like a gladiatorial arena—1,000 people in a fight to find the last victor. Short-term trading is the same; those who can multiply their capital hundreds or thousands of times in a short period are all “climbing out of a pile of corpses.” You need to hone a strategy that belongs to you through relentless practice, but it must also be perfectly timed with the market, and your luck has to be good enough. Only then can you stand out!

But here’s a particularly cruel point: markets are never static. They are constantly changing. Sometimes, it’s Trump influencing the market; other times, institutional players or macroeconomic shifts. The market is unpredictable.

So how does a top trader break through during these times?

They have refined their “martial arts” thousands of times in these “specific market conditions,” and this set of skills—like the Eighteen Dragon Subduing Palms—has already brought them returns of hundreds or even thousands of times in a short period. Ordinary people tend to think their skills are impressive, believing the market is cooperating with them, or that they can read candlestick charts, and become overly confident, thinking they are geniuses.

But as the market changes, this set of skills may no longer suit future conditions. You need to adapt, but that’s very difficult.

When you’ve earned 100x or 1000x in a period, you develop absolute faith in your martial arts. You won’t admit your strategy has flaws. Imagine if it were you—would you easily give up your “ultimate martial arts” that brought you success?

This is actually consistent with the principles described in the book “The Innovator’s Dilemma”: companies that achieve industry leadership through marginal innovation, but once they grow into giants, they can no longer innovate at the edges because they have performance and revenue targets. They can’t afford to give up current profits to pursue uncertain innovations. The real limit isn’t your ability but your past success.

So this is the first dilemma for top traders: when you can no longer profit from your previous “martial arts,” and you keep losing, you’ll start doubting yourself. The best solution at this point is to preserve your gains and take a break. The most effective approach at this stage is to say, “I’ve made enough, I’m done,” and walk away from the table. This requires top-level cognition, self-control, and a lack of greed—things most ordinary people can hardly do. Think about it—if it were you, could you do that?

Most people can only reach the point where they go to a casino, turn 1,000 into 10 million, then lose 5 million, and stop playing. They might still make about 5 million. But that’s already very difficult—only about 10% can do it. The other 90% will want to win back the 5 million they lost.

Now, let’s talk about the second dilemma. When your assets reach a certain scale—say, over 100 million in the crypto market—your funds will attract attention. Your trading methods will be studied by other institutions. As big fish, they want to eat the small fish. For example, recently, Yi Lihua managed over a billion yuan in funds, only using 2x leverage, and was targeted. We’ve analyzed this before.

The only way to break through this second dilemma is to turn your assets and trading into an institutional model—using a team-based approach to rebuild strategies that fit the market and continuously adjust. Only then can you possibly overcome this second challenge. But at this point, you still face the constant threat of institutional competition.

So no matter what you do, you’re always competing with higher-level players. There are no rules between hunters and prey—only who survives in the end!

In conclusion, why is it so difficult for short-term traders to transcend cycles?

Because they are limited by five things:

• The nature of the game (someone must lose)

• Market changes (strategy becomes invalid)

• Cognitive rigidity (resistance to change)

• Capital scale (capacity ceiling)

• Opponent evolution (being countered and harvested)

Finally, I’ll give a harsh truth: short-term trading is even harder than gambling. Because in gambling, you know you’re betting. But short-term trading creates an illusion—you think you can control everything!

The people who can truly transcend cycles are not necessarily the best traders, but those who can control risk and desire. The market rewards not the smartest, but those who survive the longest!