24) The world is in a constant state of decay. Reality keeps shifting, and everyone’s models drift out of date and out of calibration. That is why there will always be room for the young, the hungry, and the obsessed to make money. People are like exponential moving averages of their lives. Short windows catch new trends first, even if some of what... See more

21) Profitable trading implies a worldview that is more aligned with reality than that of the market’s dollar weighted average participant. But alignment in one market does not automatically translate into alignment in other markets. What carries over are the meta skills in recognizing and monetizing edges, understanding adverse selection, and... See more

18) Trading is a zero sum game inside a larger positive sum game. Though every trade has a winner and offsetting losers, markets as a whole direct resources across space and time and help civilizations grow. The emergent objective of complex systems is usually only visible in hindsight. If you get too cynical about the uselessness of what you do,... See more

16) Only the paranoid survive. Panic early. Always have an exit plan. Avoid deep drawdowns. Have humility and leave room for unknown unknowns. Be aware when you are selling tails. Stay liquid. Respect counterparty risk. Respect path dependence.

15) The longer you trade you realize that you need to eventually find the need to build the foundation of your identity on something stable. An identity built on talent or contrarian views get challenged fast. Identities built on process are more sustainable, even if they trade off novelty and exhilaration.

13) Trading exposes your deepest insecurities about yourself and the world. It is a fast way to learn what reality is and where you fit in it. In a way, everyone is a trader. We make calculated decisions with incomplete knowledge, manage drawdowns to avoid ruin, and turn our natural edges into returns. Almost everything comes down to calibrating... See more