The Impossible Triangle of Sudden Wealth

There is a theory in trading called the Impossible Triangle of Excess Returns, which states that a strategy that can make big money can only satisfy at most two of the following three points, and cannot satisfy all three:

1. Continually effective;

2. Well-known;

3. Easy to execute;

If points 1 and 2 are satisfied, execution will inevitably be difficult; there will be extremely high barriers, such as being a descendant of a powerful family, having gained a large amount of cheap chips in advance, or the principle of high-frequency trading is simple: if you are faster than others, you can profit from market discrepancies, but this requires strong technology.

If points 1 and 3 are satisfied, it will inevitably be unknown to people, essentially profiting from the information gap. Many small entrepreneurial ventures are essentially a little secret that others do not know.

If points 2 and 3 are satisfied, then the strategy will not be continually effective; for example, many patterns and indicators will always experience periods of being accurate and inaccurate, which is caused by the reflexivity of the market. Without feedback from the market on the actions of participants, the market would cease to exist.

In reality, making money is the same; essentially, it boils down to three points: doing what others cannot (with barriers), thinking what others do not think (having advanced cognitive ideas), and persisting in what others cannot endure (enduring tough times). #美国加征关税 #马斯克宣布离开特朗普政府 $BTC $ETH