Biological Traps in Trading: Why Small Wins Are More Reliable Than 100 Times?

Author: VKTR

Compiled by: Luffy, Foresight News

After a long break, I recently started actively trading perpetual options again. This reminded me of when I first began trading in 2018. At that time, some of my favorite traders shared knowledge that forever changed the way I view the market. I'm not great at writing, but I've always been grateful to my predecessors and hope to pass on this knowledge. So let's give it a try.

One principle I remember to this day: the biological mechanism of winning is almost etched into the genes of all living beings.

When two lobsters fight, the winner's hormones surge. He becomes filled with serotonin and testosterone, strutting around like a "lobster alpha"; while the loser curls up, sulking, entering the "beta lobster" self-soothing mode.

This is not just random nonsense from a nature documentary. Jordan Peterson, despite being a bit mentally unstable, is fundamentally correct in his views. There's a reason he talks about this. Victory truly reshapes your brain; your posture changes, confidence soars, and your eyes are filled with opportunities rather than threats. This is a process of millions of years of evolution; your brain doesn't care whether you're fighting for territory or competing in the market.

The logic of trading is just like that.

Every small profit excites you. Each profitable trade sharpens your senses, preparing you for the next victory. But in my experience, most novice traders do the exact opposite.

They chase "get-rich-quick" schemes instead of accumulating boring profits; they flaunt screenshots instead of earning actual profits; they endure an 80% drawdown, calling it "faith"; they revenge trade after losses instead of thinking calmly; they compare their meager 2% unrealized gains to some KOL's tenfold insider trading.

True winners quietly accumulate boring profits and let time do the repetitive work.

Why Your Brain Wants You to Go Bankrupt

When you fail, your serotonin plummets, your shoulders droop, and everything looks dangerous. Your risk assessment goes completely haywire because your brain thinks you're at the bottom of the dominance hierarchy.

So, what do bankrupt traders do? They try to win back all their losses in one trade. They increase their positions, chasing the next garbage coin with a market cap under $60,000. They believe some former Fortnite scammer's signals posted on Telegram.

Excellent traders, on the other hand, do the exact opposite. They take their losses, spend maybe five minutes figuring out what went wrong, and then move on. They know that one down day among twenty up days is just noise. They protect their mindset more aggressively than their portfolio.

I often see this scenario. Someone takes a loss and immediately goes all-in with 20% of their capital on a bunch of garbage coins, like watching someone continuously slap their own face, wondering why their nose hurts.

Compounding is Always Underestimated

Most people can't grasp compounding because it starts slowly and is boring. Earning $50 on a $10,000 account makes you think, "What's the point?" But that's precisely why it works: boring makes money, while excitement is costly.

Einstein called compounding the "eighth wonder of the world." The person who proposed relativity held basic math in such high regard—think about that.

You don't need to make big profits every day; the market doesn't work that way. Sometimes you earn 1%, sometimes you earn nothing, and sometimes you lose a little. The key is that over time, your net gains will outweigh your net losses.

Take @gametheorizing as an example. I remember reading on @thiccyth0t's blog that he keeps his net worth growth around 2x each year, spending the rest of the time "zen." He ensures he doesn't overtrade or hit "peak." Those who make 100x usually can't hold onto their money, just like lottery and casino winners; they don't know how to manage wealth.

What is an Effective Strategy

Take profits early; stop thinking about diamond hands. The market doesn't care about your beliefs; it cares about supply and demand. Always take profits when you're in the green, even if it's just a little.

Record your victories. Take screenshots of every win, create a folder, and look at it when you're feeling down. Your brain needs evidence that you're a winner, not just an abstract memory of when you made money. It's fine to show realized gains, but flaunting unrealized gains is usually a bad idea—just ask any veteran.

Control your leverage. Start with 1x or 2x. Only increase leverage after you've proven you can be profitable even without it. Leverage amplifies everything—including your stupidity.

Set daily goals, but keep them realistic. Don't trade just for the sake of trading. Trading is about achieving goals and then stepping away. Go outside, connect with nature. The market will still be there tomorrow, and it might 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%, your strategy is flawed—fix it quickly.

Establish a ritual. Same setup, same time, same process. Your brain loves patterns. Create a pre-trade ritual that puts you in a winning mindset; it could be having coffee, reviewing your rules, or doing push-ups.

The Hardest Part of Small Wins

Most people make mistakes when they start accumulating small wins: you must ensure your losses are small. Small wins mean you also have to control your losses.

I struggled with this at first. My equity curve looked like a Thanksgiving turkey chart—first a small rise, then a massive red candle wiping out weeks of gains. This might be the hardest part of the entire strategy, but it's non-negotiable. A strategy of small wins and big losses will slowly destroy your account.

Losers do this: they blame others for manipulating the market. They change strategies every week. They join Discord servers looking for "alpha." They get addicted to gambling instead of treating it like a business.

Winners do this: they take their losses, learn every lesson, and prepare for tomorrow. They understand trading is a marathon, not a sprint. They know persistence is more important than excitement.

One failure among dozens of victories has almost no impact on the overall outcome.

The True Path to Success

While others are betting on the next L1 meme coin, you might be building a truly effective strategy. While they stare at open positions all day, you might be working towards your goals and then hitting the gym.

The real advantage isn't some secret trading strategy; it's discipline. It's treating trading like a business, not a casino. It's understanding that the goal isn't to be right, but to be profitable.

Most traders aim to be right, while winners aim to make money; there's a huge difference between the two.

Getting rich slowly is boring and not cool at all. Your garbage posts won't go viral because of stable profits. But you know what's even less interesting? Being poor at 30 because you chased the elusive 100x "faith position" in your 20s.

Most people flaunting Lamborghinis on social media are actually broke. They rely on a single "moonshot" to show off on social media, only to lose everything.

Of course, there are many exceptions, but in most cases, true winners are the ones you can't see.

Just Win

Small victories build momentum, and momentum puts you in a flow state. Lock in profits, boost your confidence, and become the lobster that controls the rocks.

Stop trying to prove you're smart; start proving you're disciplined. Either win or be poor.