Why do retail investors find it difficult to break free from the loss cycle of high-frequency trading?

Author: Pickle Cat

Compiled by: TechFlow

Original Title: Losing Retail Traders Are Trading, Winning Retail Traders Are Resting

Want to stop losing money in the crypto market? First, stop your day trading!

Because for the average investor, day trading is structurally a “scam.”

This article is long, but if you’re willing to spend 120 seconds reading it, I guarantee you’ll thank yourself in a few years.

I started trading as a teenager.

I’ve had victories that made me feel like “Batman,” and I’ve also suffered painful failures that still haunt me today.

I’ve tried every trading strategy that an average investor could find.

There was even a whole year when I was obsessed with day trading, thinking it would eventually turn things around for me, but I failed so miserably that every time I look back, it still stings.

My profit and loss statement (PNL) was so bad that the automated Bitcoin purchase plan I set up for my grandma made more money than I did.

Later, I transformed into a low-frequency swing trader, barely adjusting my positions. After a profitable trade, I would exit decisively and then take a break from trading for a while.

It was only then that my life started to improve, and everything became clearer.

I’m not a saint. I’m writing this to save my younger, foolish, naive, and impulsive self.

First, as an average day trader, you’re trading at high frequency without any informational advantage (no real order flow, no clear liquidity map, no market maker position info, no execution edge, nothing at all).

If you trade only a few times per quarter, you might survive.

But what if you trade more than 10 times a week?

Even if you have the world’s strongest “discipline” and “risk management,” the math will eventually wipe you out.

The reason average investors fail isn’t that they’ve never won; it’s that they’ve never stopped. The only outcome of high-frequency trading is destruction.

That’s why I’ve set up a “punishment system” for myself—if I exceed my quarterly trade limit, I get penalized.

Every major loss I’ve had happened because I kept trading after a big win instead of walking away.

And all of my big wins (the ones where I actually kept the money for a long time) happened because I took a break and cooled off after catching a big move.

This pattern is so obvious that it hurts.

“Winning” isn’t suddenly making a lot of money; true “winning” is being able to keep that money instead of losing it all the next year.

Now I see 14-year-olds on TikTok calling themselves day traders, drawing a few lines on TradingView, thinking that buying some “guru’s” course or joining a Discord group gives them some kind of actionable daily trading system.

It makes me sick. I wouldn’t care if they knew they were gambling—at least then they’d know they’re playing a game.

But the current day trading craze is even bigger than the “daigou” craze in 2016 and 2017. And we all know how that ended.

People underestimate how hard trading is but grossly overestimate their own abilities.

The problem isn’t just the math. Yes, the more you trade, the less you stop, the harder it is to make consistent profits.

The real problem is that young, average traders genuinely believe that as long as they have “discipline” and “risk management,” they’re not gambling at all. They think day trading is a “skill” that can be executed like a daily routine.

This isn’t just about crypto day trading; it applies to the US stock market and almost every other market.

High-frequency trading is only for institutions.

Take the US stock market for example.

Do you know what institutional traders never look at? Candlestick charts and TradingView.

They use Bloomberg Terminals, which have data that retail investors will never see.

Sure, you might already know this. But 14 to 18-year-olds don’t. They think their indicators are the tools all traders use.

That’s where the real danger lies.

If you know you’re gambling, at least some part of you knows when to walk away.

But once you believe it’s a “system,” you’ll never stop.

You’ll keep clicking until the market cleans you out.

Day Trading: A Casino Disguised as a Café

It’s really like a disguised casino.

When you walk into Las Vegas or Macau, you know exactly what kind of place you’re entering. You see the lights, the tables, the dealers, the noise. Your brain instantly realizes: this is gambling.

But today’s day trading is like a casino disguised as a café.

Newbie traders walk in thinking they’re there to “learn a skill,” not knowing they’ve already sat down at a table designed to slowly drain them.

So they never stop.

That’s the true tragedy—not the loss itself.

The truly sad part is that they really believe they’re not gambling, and it’s that belief that makes them keep going until they’ve lost everything.

As for those average traders who seem to be “making money” (like I used to be)… honestly, most of them just caught a lucky wave.

They had good luck at the right time, and after being “taught a lesson” by previous losses, gained just enough discipline to finally learn to walk away after a win.

Even so, such lucky ones make up less than one percent of all average traders.

Making money in trading isn’t actually that hard; the real challenge is how to keep it.