The recent market downturn presents a good opportunity for systematic learning. Yesterday, I picked up Taleb's "antifragile" theory and found it quite useful for explaining phenomena in various questions. I'm recording my thoughts here in the hope that it will inspire others.

If you're trading contracts and experiencing both wins and losses, but end up losing a lot over time, it might not be a technical issue, but rather that you've fallen into the trap of "non-ergodicity".

In his book *Fooled by Randomness*, Nassim Nicholas Taleb mentions a famous "revolver" thought experiment. This story not only explains what risk is, but also reveals why ordinary people who gamble on contracts and odds in the long run inevitably end up with nothing.

The experiment is as follows:

Imagine a deranged billionaire gives you a revolver with six magazines and one bullet. You pull the trigger once, pointing it at your own head. If you survive, he gives you 10 million. Statistically, your survival rate is 83%, and your mortality rate is 17%.

Many people think: It's worth the risk for 10 million.

From a purely probabilistic perspective, in a one-shot gamble, your probability of survival is 5/6 (approximately 83.3%), and your probability of death is 1/6 (approximately 16.7%). Many people might think that risking 16.7% of death for $10 million seems "worth the gamble." However, Taleb points out that this thinking is flawed.

The term "ergodicity" simply means that "group probability" can be equated with "individual time probability." In this game, you cannot ergodicate.

If you get 100 people to play this game, about 83 will get rich and 17 will die. On average, the profits are huge.

For you personally, you only have one life. Once that 1/6 probability event occurs, the game is over for you. You cannot enjoy the "average" results. The joy of those 83 winners is irrelevant to you; you are just one of those 17 tombstones.

As long as there is even a very small probability that it will completely eliminate you (death or bankruptcy), in the long run, this risk is almost inevitable.

In addition, Taleb proposed another upgraded version of the pistol experiment, which is closer to the current state of the cryptocurrency world:

What if you played this game once a day and received 1 million each time?

The longer you play, the closer the probability of that bullet appearing will get to 100%. In this game, it doesn't matter how many times you win, because you can only lose once. Once you lose, the game ends, and so does yours.

Returning to cryptocurrency futures, many people use high leverage, hoping for quick profits. This is like someone spinning a revolver. You might win nine times in a row (even though the gun is empty), your account multiplys tenfold, and you think you're a stock market genius with a perfect strategy. But this is just survivor bias; you just haven't landed that bullet yet.

Why does it inevitably go to zero? Financial markets always have "black swan" events—that bullet.

Price spikes, exchange outages, extreme market conditions. For spot traders, this is volatility; for high-leverage futures traders, it's a "devastating risk." No matter how much you've earned before, as long as the risk of "liquidation and exit" exists, with the increase in the number of trades, going to zero is not a "possibility," but a mathematical "inevitability."

You might think that the 1011 cryptocurrency crash was a sudden and unexpected "black swan" event, something that happened due to bad luck or other objective problems. But in fact, veterans in the cryptocurrency circle know that the situation on March 12th was very similar to 1011 in many ways, only 5 years ago. Newcomers to the circle after 2020 just didn't experience it.

Most of the friends I and others who opened contracts with 1011 and didn't encounter any problems this time are veteran investors who experienced the March 12th crash and had already mentally prepared for the worst-case scenario of March 12th.

The value derived from Taleb's wisdom lies in:

Don't risk unlimited (devastating) profits for limited gains. As long as the possibility of being wiped out exists, your expected value in the long run is zero. Want to survive in the market? The first principle isn't making money, but ensuring you never get hit by that bullet.

This aligns with my long-held philosophy of playing cautiously, avoiding excessive risk exposure, and staying at the table.

Should retail investors use leverage tools?

Of course, I'm not blindly against using leverage. In my opinion, if an opportunity truly existed to "risk 16.7% of your life to win $10 million," many people would be willing to try it, since earning the principal is so difficult.

The biggest allure of the cryptocurrency market lies in the abundance of opportunities to make big profits with small investments, and high leverage is one of them. However, most retail investors face two problems:

1. They won't just fire one shot. If they fire one shot and don't die, they'll get 10 million and feel like they're the chosen one. Then they'll keep firing one shot after another until they run into a bullet.

2. Lack of strict trading discipline, especially stop-loss orders. Using full margin without setting stop-loss orders and failing to prepare for the worst-case scenario is basically the prelude to going to zero.

Final Summary

In any game with a "devastating risk," the first thing to consider is whether you can accept the loss in the worst-case scenario (when the bullet is fired), rather than how high the potential gains are.

Risk must be within your acceptable range. Treat every contract transaction seriously, as if you were playing Russian roulette.

I personally find Taleb's theories quite helpful; if you're interested and have some free time, you can read them.

数据：此番行情拉升期间OKX占据BTC现货交易量近50%

Popular Articles