Hey everyone. Hope you’re all doing great.
I was checking out this book called Trading in the Zone and came across a part that really flipped my perspective on trading psychology.
The author discusses an experiment with monkeys and how they react to rewards.
So, basically, when a monkey got a reward every time it did a task, it would quickly get it done. But then, when the rewards stopped, the monkey just quit trying.
Things got wild when the rewards became random. Sometimes the monkey would get a reward, sometimes not. But even when the rewards completely vanished, the monkey kept going with the task.
Why is that? Because it thought that the next reward could drop at any moment.
After reading this, I thought, wow, a lot of us at the beginner or even intermediate stage do the same thing.
Just one lucky trade can get folks emotionally hooked on the market.
They jump into trades not because the setup is solid, but because of that nagging thought, "Maybe the next one will work out."
So the takeaway from this? In trading, a huge part of the challenge is dealing with emotions and those impulsive choices, plus the addiction to those unpredictable rewards.
Discipline is what really sets apart a trader from someone who's just gambling with a hopeful mindset.
At the moment the whole crypto is at this stage: the rewards have (temporarily) finished - the entirely new crypto episode has begun from 2018 - but at the basis of past huge rewards everyone calculates the ROIs based on the whole crypto history (2009-2026) that are still very good. And hopes that old good times will come back...
Look for example:
Bitcoin price increases in the period 03/01/2009 - 31/12/2017 (3285 days) 14 000 000x (from 0.001 usd to 14 156 usd)
Bitcoin price increases in the period 01/01/2018 - 09/05/2026 (3051 days) 6x (from 14 156 usd to 80 183 usd)
Litecoin price increases in the period 03/01/2009 (actually 07/10/2011) - 31/12/2017 12 000x (from 0.02 usd to 232 usd)
Litecoin price increases in the period 01/01/2018 - 09/05/2026 0.25x (from 232 usd to 58 usd)
Etherum price increases in the period 03/01/2009 (actually 22/07/2014) - 31/12/2017 2 500x (from 0.30 usd to 757 usd)
Etherum price increases in the period 01/01/2018 - 09/05/2026 3x (from 757 usd to 2314 usd)
and so on...
Here, I'd note that in March 2018, the price of the EOS token reached $21 per token. In the summer of 2017, this token was trading at 0.50 cents.
Also in 2018, a new investment opportunity emerged (the BNB token). Many traders managed to make significant profits by purchasing this token.
The 2020-2021 bull market also brought numerous opportunities. For example, the price of Bitcoin rose from $3,500 to $69,000. Solana brought significant profits to investors. Doge Coin also brought in huge profits.
Later, many traders managed to profit from meme coins. Some traders managed to profit from the rise of coins like Monero and ZCash in 2025...
And some traders not only go long but also short declining assets. Thus, any trader who truly understands the current market can make big money (regardless of how much Bitcoin's price has risen).
At the same time, I recently read a statement from an expert (from the field of traditional finance) who claimed that the window of opportunity for making money in crypto is now closing. This isn't just because we haven't seen significant growth in the price of crypto assets. It's also due to the arrival of large institutional players, government regulation of the industry, KYC and AML procedures, and so on. He may be right. 🤷 However, for at least 7-8 years, cryptocurrencies have provided incredible opportunities for making money. That's a fact.
That was close. But to me, this is more applicable to gambling than trading. Perhaps, I should say it's more applicable to those who mistaken gambling for trading.
In real trading, everything is well-planned, and it's not about a random guessing for results. Real traders don't always expect a win or a loss in the next outcome of a single trade, but a carefully planned system that ensures good strategy that can deliver reasonable winning and management that will make losses of no strong effect in the long run. This is why you would see a strategy with 10 losses against 3 winning trades in good ROI over time. Can such traders be trading because of the next outcome? That's not possible! Unless the person is gambling while thinking he's trading.
People who think this way (the part I underlined) about trading seem to genuinely not understand the difference between trading and gambling. Because in trading, we really have to assess and manage everything as carefully as possible. Careful analysis will yield good results, while careless analysis wont maximize returns and may even lead to losses.
And its true that trading is really more of a battle against our own emotions in the market. Fighting against ego such as fear and greed is the hardest part. In fact, even professional traders are sometimes psychologically affected, causing their emotional control to falter and leading them to deviate from the discipline they typically apply in managing their emotions and capital in their trading. Consequently, there are times when they take risks that exceed what they can actually handle.
many pivoted to memecoins since they still offer those those crazy returns.
you're correct the legitimate crypto assets are well established and won't make any broke man rich anymore but it doesn't mean there are no gains to chase.
There are great opportunities in every era. What I meant was that the episode of very simple methods like hodling BTC that even a blind monkey is able to use are over for now. This is the reality of the second crypto episode (2018-...).
In the third episode the situation can change again.
Isn't this an experiment about intermittent reinforcement? There is definitely a high persistence when there is the anticipation of
Maybe the next one hits
But we all know there's uncertainty and it adds to the downfall. It's the addiction and the brain's stimulation from receiving those rewards.
I think the hardest part about trading is actually learning how to be bored rather than learning how to read signals and charts. However, when a potential trader learns risk management, it becomes more easier to trade and this can't be compared to the feel of gambling at all.
Trading is so addictive like gambling according to Mark Douglas's Trading in the zone, because it explains how the mind works and that's why professional traders don't look for a win on every trade, instead they focus more on the edge over a series of multiple trades.
I have not read this book before but from the story youve read about the monkey and how its been related to trading, it looks quite interesting that it is going to be a book worthy of reading. Trading rewards people that are interested in it and stick to it overtime, and not just for the short time.
If youre always getting rewarded as youre getting to know more about trading, just know that it is because the markets wants your full attention and think that youve found the best alternative means to make flawless money.
Losses are part of the game, but until you lose and then your timely wins are able to cover up for your losses are you getting to become a profitable trader. Consistency is what matters here and once youve reached that pinnacle of your trading journey, everything looks easy and simpler to the eye for you to always execute from.
I think I have read this example before on this forum. The analogy is really real and the lesson we get from it is really useful for inconsistent traders who always chase profit, and leave the market when they are not making I would also count those who leave market in bear run because they can't make consistent profit so they run away and return in the bull run like birds moving for seasons.
If we are really monkeys then we have already evolved haha but we definitely have to control our emotions and how to preceived things when taking in information because it depends on us to understand the meaning of the post and we can get the meaning in a wrong way if our mind has been biased due to other data. My point is, we should not let others fool us and make stupid mistakes, but we should control ourselves and build confidence too.
If that's the case, then how come people are trading in stocks and forex? You know how huge the capital is in stocks, and more people are involved in stocks than in cryptocurrency. So why do you think institutional adoption is now going to reduce our chances of making profit? Does it mean that before, manipulation was easier for whales and by following them we could make profit? I would agree with you if you said that finding opportunities will become harder because of the arrival of institutions, but saying they are closing completely is not the right way to accept that it is getting harder for us to find them.
Now we just have to make more effort because the old ways might not work anymore. That's why we should find new methods and make them work. Instead of agreeing with such ideas, I think it is better to discuss them, and I am glad that you mentioned it so now we can discuss it. My final take is not that the opportunities are closing, but that if we get the right data, we can make even more.
Haha nice analogy.
Though at the end of the day, one can choose if he wanna be a simple minded monkey or go beyond that. We are more than capable of doing so much more-- the latter, to prevent getting burned or get addicted.
For instance, though it is pretty difficult to become numb as we are built to feel thing, we can try to control how we take action on some scenarios. Most importantly, we can plan a risk management.
It's like a casino, not a trade. And most beginners who do not have knowledge and experience, this is exactly how they feel about trading, hoping only that this time they will be lucky and make a profit. But everything ends up losing money for them in the end, just like they lost it in the casino.
If you are thinking that maybe the next one will hit, most likely you are gambling, not trading. Gambling is a game of chance and luck, while trading is a game of probability, risk management, and psychology, not by luck. Now if you are trading with discipline and systematic approach, winning will be guaranteed. And trading addiction, will be avoided if you stick to your limits and goals why you're trading.
However, trading may still be like gambling for some, but this is only true for those who sees trading like how gambling is done. But if you trade because you know your own potentials, you have your skills and proven, tested trading strategy, and you don't rely on luck, that makes you a real trader, not trading to gamble.
There are degens trader who always went all in, go home or go broke type of person. This experiment precisely explains that behaviour.
This doesn't happen only in trading but anything that involves adrenaline inducing activity will always have those kind of people who get addicted for no reason.
What it takes to not be like this is making decision with sound mind and be responsible.
ADDICTION is the keyword. That's absolutely why most of the PLEBS, who neither have the right amount of capital or the skillset, will NEVER make a large amount of money to change their lives through "trading".
Do you believe that YOU are actually a "good/winning trader" merely because you made SOME money during the last few weeks/months?
Can't disagree with that. Discipline sure does help us avoid unwanted losses and in turn generates decent profits.
There's a thin line between gambling and trading and emotions do really decide which side you are on.
Trading randomly and hoping to win the trade is purely gambling but if you analyse the market, wait for your setups, get the right entry point and take profits with desired margin then you are just trading.
I didn't claim it was true... I simply cited this expert's opinion and suggested he might be right. 🙋
I became seriously interested in cryptocurrencies in 2017, and it was a time of great opportunity in the crypto industry... I recently decided to recover my Ethereum wallet from 2017, which I had destroyed all information about in 2018 (it no longer contained any interesting assets, or so I thought). After a long search in my apartment, I suddenly discovered the private key. The wallet contained assets worth $50! Those were the days!
In 2018, I participated in various airdrops, spending 5 minutes a day on them. I received tokens from various projects. This brought in a good profit. And some tokens, as it turns out, had grown in price from $0 to $50 in seven years. And I had even forgotten they existed!
These days, no one will just send you money. Most cryptocurrency platforms require KYC. Trading is completely impossible on some cryptocurrency exchanges due to regional restrictions. Institutional players trade derivatives rather than the underlying asset, which in turn means cryptocurrencies don't appreciate in value. I'm not saying you can't make money in cryptocurrency. That's not true... However, the fact is that the opportunities for making money have become much fewer than before. Unfortunately.🤷
But for some reason, I agree with that sentence more for gambling. I am sure some gamblers feel and have that experience. Whereas in trading, maybe not all traders will have that kind of thought. Moreover, in the trading process, traders are probably more careful. It's not just a matter of opening a trade position and hoping for luck.