They were destroyed not by being wrong about their positions, but by being on the same side of the same trades as participants they couldn’t see. Their edge was real. Their models were sound. Their risk management was state-of-the-art. But they were competing against a counterparty they had failed to identify: each other.

The funds failed because they were blind to the nature of their opponent.

Who they are, what constraints they operate under, why they’re trading against you—that’s the foundation of everything that follows.