"Survivor Bias: The Biggest Lie of Hot Money Mindset"

Recently, this market setup has made me think seriously for the first time about a question: are those “hot money” trading principles that have been enshrined as dogma something I just didn’t learn well enough—or are they simply not meant to be believed in a market like this? [Taoguba]
Looking back at the trading from December 24 to now over these 3-plus months: on December 24, Commercial Aerospace established the absolute main theme of the market for that day—it then kept being aggressively pushed all the way to January 12. Over those 12 trading days, I can only say that faith overrides everything. Anyone bold enough made a lot of money, while anyone who was timid might not have gotten more than a few bucks, and after the 13th might even struggle to exit with their whole body intact. I entered on December 24, and I should say I also belonged to the “made plenty of money” crowd. In just those 12 trading days, my capital more than doubled. On January 14, I wrote a post titled “When the bubble breaks, you should pull out,” and after that I kept a slightly-in-position state to maintain a sense of the market. Then on January 22, I started entering with a larger position again, and it kept going all the way until February 13, just before the Spring Festival—ups and downs all the way, with both losses and gains. During this period, I did a rather bad job. In a choppy market, I was fooled by intraday “sucker punches” several times, so I gave back a lot of the earlier profits as well. There’s really nothing good to summarize technically about this—mainly it was going against the trend. This kind of market was never supposed to be used to increase positions. After the Spring Festival, from February 24 when the market opened all the way to March 17 when the broader market broke below the 60-day line—during this time, I can only describe my actions with “surprisingly steady.” My account’s gains and losses hovered around 2%. On March 17, I wrote a post titled “By March there probably won’t be any good opportunities left—wait until April,” and afterward I kept my position basically tiny. Of course, I also missed the opportunities in oil and gas and chemicals with the positive news from the Iran–U.S. war, but with a small position I did catch some chances in power. Similarly, the stability of my capital was beyond imagination—and this decline in the broader market affected me almost nothing. So in my heart I summarized and reflected: was my trading during this period correct? Obviously, preserving capital is the most important thing. Then you have capital to fight in the next round. This is only my own trading, but at the same time, during this period I’ve also kept observing the market—observing hot money, institutions, quant strategies, and the actions of the vast number of retail investors.
Since March 16, the broader market has been adjusting continuously, trading volume has kept shrinking, the height of consecutive-limit-ups has been suppressed, and the stock that hit limit-up the previous day gets directly nuked by a “sell-at-the-open button” the next day—it has become the norm. You’ll find that when you use classic routines like “leader strategy,” “weak-to-strong,” and “divergence-to-convergence” to trade, the result is: one trade, one loss, and even my stop-loss has trained itself into a muscle memory.
In plain terms, this kind of market isn’t suitable for trading; the more you do it, the more you lose. You’ll never be that one red dot in a sea of green. Even if you are, it’s only because of your luck. Very directly: during this period, the hot money trading playbooks basically failed. The “stock god” group got wiped out. On Taoguba,人氣 authors hardly ever got a correct call, writing one wrong article after another. And those popular authors with tens of thousands or even over a hundred thousand followers are simply not worth trusting in the first place. I can say that most of them are just “black mouths” in the stock market. If you read their articles carefully, they talk as if they know everything, but they fundamentally don’t provide any actionable guidance from real trading. Some even go on live streams to preach. Some also attend the annual Taoguba conference. These people are not real winners in live trading. Some are even living off attention and tips. In one sentence: these people are just “paper traders who write blogs.”
I’m not a winner; I’m just an old retail investor with 20 years of experience. For 20 years, I’ve fought in the market; my account has gone through multiple cycles of rise and fall. I’ve also experienced years with 10x gains and years with basically nothing. Now things are stable. My account is unusually stable. I don’t know if this is the state I’m in right before ascending beyond the ordinary, or just another leg of a fall. But I feel that my understanding has now reached a level where I can gradually see through the fog of the entire market. In writing this post, the core is only one word: survivorship bias.
** I. Why does the playbook fail when the market is bad?**
Over these past years, we’ve gotten used to a narrative like this: a certain hot money trader starts with a small amount and grows it to hundreds of millions, and what makes it possible is “emotional cycles,” “leader faith,” and “only trade the strongest.” The quotes get chewed over and over, and the setups get broken down frame by frame. We subconsciously think: as long as I learn it the way he does, I can replicate his success.
But this downturn made me understand a painful truth: all the successful experience we see from hot money comes only from the voices of “survivors.”
Those who blew up using the same methods in the same period—you’ll never hear their voices. They won’t write quotes; no one interviews them; their accounts may have already been canceled long ago.
In other words: hot money playbooks seem to “work” not because they’re universally applicable, but because only those who managed to survive using them have the资格 to come out and talk.
When the market environment switches from “a mode that favors survivors” to “a meat grinder mode,” survivors’ experience turns into a trap.
** What exactly is happening in the recent market?**
From March 3, when the Shanghai index topped, to now, it has been adjusting continuously for one month. Over those two markets, total trading value has shrunk from the most疯狂 period of 4 trillion to today’s 40k. It has already fallen to a level that can’t support a main theme at all. Throughout this whole period, the height of consecutive-limit-ups has been heavily suppressed, the rate of stocks getting hit but failing to hold limits is unusually high, and the “popular sentiment stocks” from the previous day get crushed with no premium the next day. What people call “weak-to-strong” turns into “weak-to-weak, then to limit-down.” In a market like this, any kind of playbook of “chasing strength,” “connecting/holding through momentum,” or “betting on a穿越 (breakthrough-through) situation” is, in essence, moving against probability.
It’s not because the playbooks are wrong, but because the prerequisites for their usefulness—sustained赚钱效应, abundant liquidity, and a clearly defined ladder of sectors—no longer exist.
** II. Where did survivorship bias make me wrong?**
Specifically, many people who blindly worship top hot money bosses make three cognitive mistakes:
1. Treating “survivor attribution” as “the inevitability of success”
In the past, I always thought: if a hot money trader makes big money by “adding to positions at the high point,” then adding at the high point must be right. But I never thought: what if ten thousand people also add at high points—would they all end up losing everything? That one survivor is only lucky, or he has some hidden cards I didn’t see, such as the size of capital, channels, hedging methods, and so on.
2. Ignoring the information in “silent samples”
I only look at the successful traders’ trade execution records; I never look at the losers’ loss records. But the traps that losers stepped into are actually easier to identify than the path that winners took. For example, recently, any attempt to do a “穿越龙” trade has a failure probability of over 90%—and if I collected those failed cases, I wouldn’t make the move in the first place.
3. Taking the “rearview mirror” as a “navigation device”
In hot money quotes, those lines like “why I bought it back then” are basically perfect explanations after the fact. In actual execution, at that moment, it’s filled with randomness and ambiguity. When the market is good, any explanation sounds correct; when the market is bad, any explanation sounds wrong.
** III. What I plan to change next**
It’s not about denying the hot money trading playbooks, but about switching to a different way to use them:
First judge the market phase, then decide whether to enable any “playbooks.” When the height of consecutive limit-ups has been continuously below 3 limits, and the limit-up premium is negative, then by default all offensive playbooks are considered invalid. Only trade defensively—use an empty position or test with an extremely small position.
Intentionally collect “failure samples.” Every weekend, not only review profitable trades, but also review those “big faceplant” trades—including your own and hot money’s. Ask yourself: can this pit be identified in advance? In the current market, what is the real win rate of this kind of pattern?
Imprint survivorship bias in your mind. Whenever you see a “big shot” doing some super move, immediately ask: if you let 100 ordinary people use the same method for 100 times, what would the outcome be? How many would die before they succeeded?
** IV. Final reflections**
The biggest value of this downturn for me isn’t how much I lost, but that it finally woke me up from the illusion of “worshipping survivors.” In fact, during this round I didn’t even lose money.
A hot money boss’s experience is like a lottery winner’s心得—“the secret is that I pick numbers like…”. He might be telling the truth, but that’s not what you should learn.
Real growth isn’t about learning a set of “sure-win playbooks”; it’s about learning to identify: which successes can be replicated, and which successes are just the solitary statements of survivors.
So, stop treating survivors’ quotes as scripture. The only thing you should believe is the numbers in your account.
But these few lines must definitely be regarded as dogma, and should ring in your ears at all times:
1, preserve capital, preserve capital, and still preserve capital!
2, bet only at the correct time, not all the time. Wait patiently for high-probability opportunities, and reduce meaningless trades.
3, don’t predict tops and bottoms. When the opportunity comes, just follow.
4, always trade the hot main theme only—if you can’t make money where capital is converging, you can’t make money anywhere else.

    Today’s live trading: On March 30 at the open, I bought Qiangrui Technology, and it’s been pretty good. I’ve held the position and not sold it—this is the practice of doing “follow the move.”