Investment Expert Shares: Four Key Elements of Successful Trading

Over the past five years, a seasoned FOF investor has conducted in-depth research on hundreds of fund teams and summarized four key points for successful trading. This expert has a unique insight into the cryptocurrency market, having been responsible for asset allocation at a family office with a technology background.

Common Characteristics of Excellent Traders

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

performance

The performance of a fund must be supported by reliable data. In the secondary market of cryptocurrencies, information transparency is often insufficient, making the authenticity, sustainability, and attribution analysis of past returns particularly important. The key is to identify which past performances can represent future results.

Team

Team evaluation includes various aspects such as background, reliability, and communication skills. The main considerations are as follows:

1. Integrity is the primary standard. Whether it's proprietary trading or asset management, the principle of honesty must be upheld.

2. Hands-on involvement is crucial. An excellent trading team typically remains lean, with no more than five core members, and the leader must be directly involved in trading.

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

Strategy

Strategies need to align with current market demands and industry development trends. Experts point out that there is still a significant gap between the cryptocurrency secondary market and the traditional secondary market in terms of backend construction, customer management, strategy complexity, and compliance, which also means huge development opportunities.

Methods for Continuous Improvement for Traders

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. Leverage the "Street Smart" trait to delve into the frontline of the market, seizing trading opportunities and value judgments.

4. Learn from the excellent, seek high-level guidance to break through bottlenecks.

How Institutions Configure Cryptocurrency Assets

Family offices' allocation to cryptocurrency assets varies based on the attributes and preferences of their funds. This expert personally prefers secondary market investments and categorizes the cryptocurrency secondary market into four types:

1. Mining and long-term holding
2. Technical Trading and Quantitative Strategies
3. Trading based on subjective judgment and "value"
4. DeFi Investment

Current Market Performing Strategies

1. Currency-based Enhancement Strategy

   • TVL games and airdrops
   • Quantitative Trading

2. Purchase Bitcoin at a discount or participate in mining

3. A phased strategy to outperform Bitcoin, such as CTA (Commodity Trading Advisor)

Recommended Reading

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

The expert emphasized that understanding human nature is crucial for dealing with complex interest relations, which is the foundation of successful transactions.