The world’s most formidable investment masters are called “financial crocodiles.” Why aren’t they called financial tigers, financial lions, or financial big fish? Why “crocodile”?

Because although lions and tigers are powerful on land, they expend energy when hunting and can get injured when facing strong enemies.

Crocodiles, on the other hand, are patient, smart, and cold-blooded. They lie in ambush for days or even weeks at the strategic watering hole that all animals must pass through. When they succeed, they swallow their prey; when they fail, they immediately retreat into the water. High returns, low risk.

Crocodiles may look like they have short legs, but they actually run faster than humans on land. However, crocodiles give up the land hunts they’re not good at—because it consumes energy and carries risk—and focus on waiting in the water. Traders should be like crocodiles and only do what they excel at to ensure long-term survival, just like crocodiles have survived since the dinosaur era—200 million years.

Their hunting method appears passive but is the most effective: catching prey with minimal energy, seeking the largest profit at the lowest cost. This is what great financiers and crocodiles have in common.

The core essence is: small losses, big gains. That is, the commonly said “cut losses short, let profits run.” Start small, add to winning positions.

Find a simple indicator to distinguish between bull and bear markets. Only go long in a bull market and open positions at classic top signals. Wait on the inevitable path of the trend. Enter at key points. Don’t care too much about win rate. The win rate can’t be extremely high, nor does it need to be. Entering at key points means targeting a potentially large profit-loss ratio—entering where the stop loss is small and it’s easiest to prove you’re wrong.

Usually, this is at the bottom or early in a trend, with a base position. Risk always comes first. The base position you put in must be able to withstand the largest historical losing streak; ideally, set an even more conservative stop loss. This is the number one principle. If the key point is breached, you must stop out, no exceptions. If the price comes back, you can look for another entry opportunity, but never stubbornly hold on just because you’re bullish.

There’s no need to even mention the stupidity of averaging down on losses. The core to making big money is adding to winning positions as the price rises as expected and then pulls back; add at the support of the pullback or after breaking the previous high.

Use pyramid-style add-ons and move your stop loss after adding. Move it to the new key point; the base position is now safe, and only the stop loss on the added positions is at risk. If it fails, stop out and wait for the next opportunity. If the price keeps rising, hold firmly, keep waiting for pullbacks to add, and keep moving the stop loss.

Take profit: never exit lightly. Wait patiently for classic top signals or divergences before exiting. You can exit in batches or all at once; ideally all at once, so you can force yourself to wait for the highest-probability top signal. Floating profits will definitely pull back; you must accept this and not try to sell at the very top. Inevitably, there will occasionally be V-shaped reversals, and most or all floating profits will be lost. You can optimize this personally, but the best way is to accept it calmly because these aren’t the types of moves you’re trying to capture.

This is the core principle of successful trading. As long as you stick to these principles, there are plenty of methods and indicators you can use; there’s no “best”—only what suits you best. You need to find it through practice.

As long as you master and follow these principles in practice, even with a very simple indicator, if you use discipline to maintain consistency, you’ll find that making money is actually a simple and boring thing. Overcome yourself; overcome human nature!