Author: VKTR
Compiled by: Luffy, Foresight News
Original Title: Biological Traps in Trading: Why Small Wins Are More Reliable Than 100 Times?
After taking a long break, I recently started actively trading perpetual options again. This reminded me of the time when I first began trading in 2018. Back then, some of my favorite traders shared some knowledge that forever changed the way I view the market. I’m not good at writing, but I’ve always appreciated the seniors and hope to pass on this knowledge. Let’s give it a try.
There is a principle I remember to this day: the biological mechanism of winning is almost inscribed in the genes of all living beings.
Two lobsters fight, and the winner’s hormones will surge. He will be filled with serotonin and testosterone, strutting like a “lobster macho”; while the loser will curl up, sulk, and enter “beta lobster” self-soothing mode.
This is not just some random nature documentary nonsense. Jordan Peterson, although slightly schizophrenic, is basically correct in his views. There is a reason he talks about this. Victory really does reshape your brain; you change your posture, exude confidence, and see opportunities rather than threats. This is a process of millions of years of evolution; your brain doesn’t care if you’re fighting for territory or competing in the market.
The logic of the transaction is exactly like that.
Every small profit will excite you immensely. Every profitable trade will make you more alert and prepare you for the next victory. However, in my experience, most novice traders do the exact opposite.
They chase “a leap to success” instead of accumulating boring profits; they flaunt screenshots instead of earning actual profits; they endure an 80% drawdown, calling it “faith”; they engage in revenge trading after losses instead of thinking calmly; they compare their meager 2% unrealized profit and loss with the 10 times insider trading of certain KOLs.
The real winners are quietly accumulating boring gains and letting time do the repetitive work.
Why does your brain want you to go bankrupt?
When you fail, your serotonin plummets, your shoulders droop, and danger seems to be everywhere. Your risk assessment goes completely awry because your brain thinks you are now at the bottom of the hierarchy.
So, what will the bankrupt traders do? They try to win back all their losses in one trade. They increase their positions, chasing the next junk coin with a market cap below 60,000 dollars. They believe the signals sent by a certain scammer from Fortnite on Telegram.
Excellent traders are quite the opposite. They take losses and may only spend five minutes figuring out where the problem lies before moving on. They understand that one down day out of twenty up days is just noise. They protect their mindset more aggressively than their portfolios.
I often see this kind of scene. Someone loses a sum of money and immediately goes all-in with 20% of their capital on a bunch of junk coins, just like watching a person keep slapping their own face, not understanding why their nose hurts.
Compound interest is always underestimated.
Most people cannot understand compound interest because it starts slow and boring. If you earn $50 on a $10,000 account, you might think, “What’s the point?” But that is exactly why it is effective: boring can make money, while excitement is costly.
Einstein referred to compound interest as the “eighth wonder of the world”; the person who proposed the theory of relativity actually held basic mathematics in such high regard. Just think about it.
You don’t need to make a big profit every day; that’s not how the market works. Sometimes you earn 1%, sometimes you earn nothing, and sometimes you may lose a little. The key is that over time, your net gains will be greater than your net losses.
Take @gametheorizing, for example. I remember reading in @thiccyth0t’s blog that he keeps his net worth growing by about 2 times a year, and spends the rest of his time “Buddhist”. He makes sure he doesn’t overdo it or hit a “peak”. Those who make 100x often can’t keep their money, and like lottery and casino winners, they don’t know how to harness their wealth.
What is an effective strategy
Take profits as soon as possible, and stop thinking about diamond hands. The market doesn’t care about your beliefs; it cares about supply and demand. Always take profits when you are in the green, at least a little each time.
Document your victories. Take screenshots of each win, create a folder, and look at it when you’re feeling down. Your brain needs evidence to prove that you are a winner, rather than just abstractly recalling the moment you made money. It’s fine to share realized profits and losses, but sharing unrealized profits and losses is usually a bad idea; just ask any veteran.
Control your leverage. You can start with 1x or 2x at first. Only increase your leverage after you prove that you can make a profit even without leverage. Leverage amplifies everything—including your foolishness.
Set daily goals, but make sure they are realistic. Don’t trade just for the sake of trading. Trading is meant to achieve goals and then exit. Go outside and connect with nature. The market will still be there tomorrow, and it may look completely different.
Track your win rate. Prepare a simple spreadsheet, or use profit and loss pages like @CoinMarketMan, @tradestream_xyz, or @AxiomExchange. If your win rate is below 60%, it indicates an issue with your strategy, so make sure to correct it quickly.
Establish a sense of ritual. The same setup, the same time, the same process. Your brain likes patterns. Create a pre-trading ritual that puts you in a winning mode; it could be drinking coffee, reviewing your rules, or doing push-ups.
The hardest part of Xiaoying
Most people make mistakes when they start accumulating small wins: you must ensure that your losses are small. Small wins mean that you must also control your losses.
I struggled with it at first. My money curve is like a Thanksgiving turkey chart – a slight uptick followed by a huge black candlestick that wipes out weeks of gains. This may be the hardest part of the whole strategy, but it’s non-negotiable. A strategy of small wins and big losses will only slowly destroy the account.
! [Creature Traps in Trading: Why Small Wins Are More Reliable Than 100x?] ](https://img-cdn.gateio.im/webp-social/moments-4568e522079ec28e8eab91d59ba2716f.webp)
Losers do this: they blame others for manipulating the market. They change strategies every week. They join Discord servers to look for “alpha.” They are addicted to gambling instead of treating it as a business.
Winners do this: they take losses, learn all the lessons, and prepare for tomorrow. They understand that trading is a marathon, not a sprint. They know that perseverance is more important than excitement.
A single defeat among dozens of victories will hardly have any impact on the outcome.
The true path to success
While others are betting on the next L1 dog coin, you might be developing a truly effective strategy. While they stare at their open positions all day, you might be working towards your goals and then heading to the gym to work out.
The real advantage does not lie in any secret trading strategies, but in discipline. It lies in treating trading as a business, not a casino. It lies in understanding that the goal is not to be right, but to be profitable.
Most traders aim to be accurate, while winners aim to make money. There is a huge difference between the two.
Getting rich slowly is boring and not cool at all. Your garbage posts won’t go viral just because of stable profits. But do you know what’s even more meaningless? What’s less cool is being poor at 30 because, in your 20s, you were chasing an elusive 100x “faith-based position.”
Most of the people who flaunt Lamborghinis on social media are actually very poor. They rely on a “moon landing” to show off on social media, and then lose everything they invested.
Of course, there are many exceptions, but in most cases, the real winners are the ones you don’t see.
Just win
Small victories build momentum, and momentum puts you in a state of flow. Lock in profits, boost your confidence, and become the lobster that controls the rocks.
Stop trying to prove that you are smart, start proving that you are disciplined. Either win or be poor.
