– Every $100 he managed turned into over $2.1 million
– Averaged 66% annual returns for 34 straight years
Here are 10 trading rules from Jim Simons every trader should know
(Rule #5 saved me a lot of money)
Jim Simons, born in 1938 in Massachusetts, was a math prodigy.
He studied at MIT and got his PhD at Berkeley by 23.
Early on, he saw math as a way to uncover hidden patterns in the world.
Before finance, he worked as a codebreaker at the NSA during the Cold War.
He became known for finding patterns where others only saw noise - skills that later made him billions in trading.
Simons then returned to academia, becoming a professor and chair of math at Stony Brook University.
He published groundbreaking work in geometry.
Colleagues already considered him a genius long before Wall Street.
In 1978, he left academia for trading.
His idea: markets are like secret codes.
With enough data and math, you can crack them.
That vision became Renaissance Technologies.
In 1982, Simons founded Renaissance Technologies.
Its star creation - the Medallion Fund - became the most profitable hedge fund in history.
This is where math, data, and discipline turned into billions.
Medallion vs. S&P 500 is mind-blowing.
$100 invested in Medallion in 1988 became ~$2.1M by 2018 (after fees).
The same in the S&P 500? ~$1,100.
That’s ~39% net annual returns over 30 years - with zero losing years.
Rule 1: Data + Discipline
Simons: “We don’t start with models. We start with data.”
Once tested, he never overrode the system.
In crypto: test with data, not feelings - and stick to your plan.
Rule 2: Small Edge
Medallion was right only ~50.75% of the time - barely above a coin flip.
But with huge volume, that tiny edge compounded into massive profits.
Lesson: you don’t need to win every trade, just tilt the odds your way.
Rule 3: Manage Risk
Even with a 70% win chance, bad streaks happen.
Simons prepared for losing runs.
In crypto: expect volatility, manage risk, and survive the downswings.
Rule 4: Innovate
Markets evolve. His team constantly updated models to stay ahead.
Crypto changes fast too - keep learning, adapt, don’t assume old strategies will always work.
Rule 5: Remove Emotion
Early on, even brilliant team members panicked.
So he pushed for fully automated trading to eliminate fear and greed.
Lesson: don’t let FOMO or fear run your trades. Use rules or bots to keep you disciplined.
Rule 6: Protect Your Edge
Simons capped fund size and went secretive.
Medallion even stopped taking outside money in 2005 to protect returns.
In crypto: if you find an edge, keep it quiet - and don’t overbet.
Rule 7: Think Differently
He hired scientists, not Wall Street types.
“We don’t hire people from Wall Street… we hire people who’ve done good science.”
In crypto, new insights often come from tech and data science, not traditional finance.
Rule 8: Teamwork
Simons didn’t build the model - he built the team that built it.
You may not have PhDs on staff, but you can learn from crypto communities, analysts, and open research.
[Image: Image] (https://pbs.twimg.com/media/G1JBx_naAAASFa9?format=png&name=360x360)
[Image: Image] (https://pbs.twimg.com/media/G1JByL4aMAA5lRe?format=jpg&name=360x360)
[Image: Image] (https://pbs.twimg.com/media/G1JByWcaQAAtHFB?format=png&name=360x360)
Rule 9: Diversify
Medallion used thousands of small, uncorrelated models at once.
That kept profits steady.
Crypto takeaway: don’t bet everything on one coin or one strategy.
Rule 10: Long Game
Simons didn’t win overnight.
It took years of refining models, struggles, and persistence to reach legendary returns.
Trading is a marathon. Be patient, keep learning, and let compounding work.
