120 seconds to change your trading mindset: Why is intraday trading for retail investors considered gambling?

Author: Pickle Cat

Compiled by: Tim, PANews

If you don't want to keep losing money in the crypto market, the first thing you should do is stop day trading.

Because intraday trading by retail investors is essentially a scam.

This is a long article, but if you give me 120 seconds, I guarantee you'll thank me in a few years.

I started trading when I was a teenager.

I've had moments when I thought I was a genius, and I've also experienced the painful lesson of truly starting from scratch and slowly recovering.

I have tried every trading strategy that retail investors can find.

These deeply painful memories are often the scars that bring us to our most acute awakening.

My trading profits were meager; even my grandmother, whom I helped set up an automatic Bitcoin investment plan, earned far more than me.

Later, I became a low-frequency swing trader, rarely operating any positions. Once I took profits, I would immediately exit the market and then stop trading for a period of time.

It was after that that my life gradually improved and everything returned to normal.

I am not a saint. I write this in order to save that younger, foolish, naive, and heartbreakingly impulsive self.

First, as an intraday trader, you are engaging in high-frequency trading but you have no informational advantage (no real order flow information, no complete liquidity distribution chart, no understanding of market maker position layout, and no operational advantage, nothing at all).

Doing it a few times a quarter might survive. But what if you do it more than ten times a week? Even with the world's strongest "discipline" and "risk management" skills, mathematical laws will still bury you completely.

Retail investors fail not because they've never made money, but because they can't stop. High-frequency trading only has one end: zero.

This is indeed the reason I established the penalty mechanism; once the quarterly transaction limit is exceeded, it must be enforced.

Every major loss I've experienced has occurred after a period of great profit, because I didn't choose to stop, but instead continued trading.

All my truly profitable trades (and the ones where I held onto my profits for a long time) were made by seizing a market trend and then calmly taking profits.

The pattern is so obvious, so blunt, that it stings.

Profits are not fleeting windfalls.

Winning means being able to hold onto profits and not lose them all the following year.

I saw a 14-year-old on TikTok claiming to be a day trader, drawing lines on TradingView, thinking that he had mastered some kind of daily executable trading system just by buying master courses or Discord groups.

This behavior is disgusting, because I wouldn't be so repulsed if they knew they were gambling. At least then they would know what game they're playing.

The current intraday trading frenzy is even greater than the ICO wave of 2016 and 2017, and we all know how it ended.

People underestimate the difficulty of transactions while greatly overestimating their own abilities.

The problem isn't just about numerical calculations. Indeed, the more frequently you trade and the less strictly you enforce stop-loss orders, the more difficult it becomes to achieve consistent profits.

But the reality is that young retail traders genuinely believe that as long as they follow "discipline" and "risk management," they are not gambling at all. They see day trading as a "skill" that can be performed like any other daily task.

This is by no means limited to intraday trading in the crypto market. The same logic applies perfectly to the US stock market, and indeed to all markets.

High-frequency trading is only suitable for institutions. Do you know what institutional traders don't look at? Candlestick charts and TradingView.

They use Bloomberg terminals, which give them access to data that retail investors can never obtain.

You probably know this. But young people aged 14 to 18 don't know this; they think the indicators they use are the ones all traders use.

And that is precisely the real danger.

When you realize you're gambling, at least part of you knows when to stop.

But once you believe it's a "system," you never stop.

You keep trading until the market completely drains you dry.

This really feels like a disguised casino.

When you step into Las Vegas or Macau, you know exactly what you're going to face.

You see the lights, the gambling tables, the dealer, and hear the noise. Your brain knows perfectly well that this is gambling.

But today's day trading is nothing more than a casino disguised as a coffee shop.

New traders walk in thinking they're there to "learn a skill," unaware that they've already sat down at a gambling table designed to slowly drain them dry.

So the real tragedy is that they never leave, not because they lose money.

The real problem is that they don't truly feel like they're gambling. This will keep them at the table until they run out of chips.

And those retail investors who seem to have "won" (like me) are, to be honest, mostly just happened to catch a big surge.

Their luck came at just the right time, and coupled with the discipline they had honed from previous failures, they finally learned when to quit while they were ahead.

Even so, this small group still accounts for less than one percent of all retail investors.

Making money in trading is not that difficult for many people; the real challenge lies in how to hold onto the money they earn.

PANews interviewed the author; interested readers can listen to Xiaoyuzhou's blog: "The Crypto Gen Z and Her Friends" NO.3 – Female Degen, Trader, Rebel