The truth about retail investors losing money: Trading 10 times a week is worse than taking a break, winners are all just being lazy

The biggest difference between retail investors losing money and making money isn’t technology, but trading frequency. Data shows that losing retail investors trade more than 10 times per week on average, while profitable retail investors might only trade 3 to 5 times in a quarter. Ordinary investors face a structural disadvantage in intraday trading: no real order flow, no clear liquidity map, no market maker position information, and no execution advantage. True winners know to rest and stay calm after a big win, rather than continuously trading.

The Three Deadly Traps of Frequent Trading

The core reason retail investors lose money isn’t that they’ve never won, but that they’ve never stopped. High-frequency trading is structurally a trap for ordinary investors. When you trade more than 10 times a week, even with the strictest discipline and risk management, mathematics will ultimately lead you to lose badly.

The first trap is information asymmetry. Retail investors engage in high-frequency trading without any informational advantage, using Bloomberg terminals with data ordinary investors can never see. Retail investors stare at TradingView’s candlestick charts, thinking that a few indicators can compete with institutions, which is a joke in itself. If you only trade a few times per quarter, you might survive, but high-frequency trading is only suitable for institutions.

The second trap is cost accumulation. Every trade involves fees, slippage, and spreads, which seem small but compound exponentially in high-frequency trading. Suppose each trade costs 0.2%; trading 10 times a week amounts to 2%, and in a month, 8%. This means you need to earn over 8% monthly just to break even, not including losses. In contrast, profitable retail investors trading 3 times per quarter might only pay 0.6% in costs.

The third trap is psychological exhaustion. Frequent trading can lead retail investors into an addiction cycle: each click releases dopamine, but this excitement gradually dulls judgment. When you monitor the market 8 hours a day, your brain begins to seek trading opportunities even when none exist. That’s why losing retail investors are always trading, while profitable ones are often resting.

Three Critical Moments of Retail Investor Losses

Big wins are not to be taken for granted: Every major loss often occurs after a big win, because the real skill is in protecting your capital, not constantly earning.

Losing small and trying to recover: After losing 5%, immediately opening new positions to recoup losses, resulting in revenge trading, and ultimately expanding losses to 20%.

Bored and trading recklessly: Trading without clear signals just for the sake of activity, treating investing like a game rather than waiting for confirmed opportunities.

Why Rest is the Core Strategy for Making Money

Successful retail investors share a common trait: they decisively exit after winning and pause trading for a period. This isn’t luck, but a deliberate strategy. Making money in trading isn’t hard; the real challenge is how to preserve that money.

Setting a limit on trading frequency is an effective way to protect oneself. Experienced traders often implement a “punishment system”: if they exceed quarterly trading limits, they face penalties. This mechanism forces you to only act when the opportunity is truly certain, rather than opening positions on every small movement. Trading only 3 to 5 times per quarter means waiting for real big opportunities instead of chasing every fluctuation.

The wisdom of running after a win lies in breaking the trading addiction cycle. All successful long-term money preservers do so because they seize a major trend and then choose to rest and stay calm. Though this routine may be painfully obvious, most retail investors simply can’t learn it. They tend to seek the next opportunity immediately after a 30% win, only to give back all profits through consecutive losses.

The value of rest isn’t just avoiding overtrading; it’s about maintaining clear judgment. When you pause trading for a while, your brain escapes the anxiety of “must trade” and regains the ability to evaluate the market objectively. Only then can you see what truly presents an opportunity versus what’s just your own imagination.

Intraday Trading: A Gambling Game Masquerading as Skill

The greatest tragedy of retail investors losing money isn’t the losses themselves, but that they genuinely believe they aren’t gambling. The intraday trading craze surpasses even the reseller boom of 2016 and 2017, and we all know how that ended. Young ordinary traders truly believe that with discipline and risk management, they’re not gambling at all, and that intraday trading can be a skill practiced as a daily routine.

It’s like a casino disguised as a coffee shop. When you walk into Las Vegas or Macau, you know exactly what kind of place it is; your brain immediately recognizes it as gambling. Today’s intraday trading, however, new traders walk in thinking they’re learning a skill, unaware that they’re already sitting at a table designed to slowly drain their funds.

If you admit that you’re gambling, at least part of your mind will know when to stop. But once you believe it’s a system, you’ll never stop—you’ll keep clicking until the market wipes you out. That’s why people underestimate the difficulty of trading and overestimate their own abilities.

As for the ordinary retail traders who seem to be making money, honestly, most of them just caught a wave. They got lucky at the right time, combined with a bit of discipline learned through previous losses, and finally learned to stop after winning. Even so, such luckiest among all retail traders constitute less than 1%.

Want to stop losing money in crypto markets? Stop day trading first. Winning isn’t about suddenly making a lot of money; true victory is in preserving your capital, not losing it all the next year.