How Stock Market Fools You
By Sachin Malik
The stock market looks simple.
Buy low, sell high. Find patterns. Follow the trend.
Sounds easy, right?
Then why are you still losing?
You’re not losing because you’re not smart enough. You’re losing because you don’t see the trap.
You watch videos. Read books. Learn strategies.
But the market still feels like a mystery. It keeps tricking you. Again and again.
It’s not your fault. The market is built to fool you.
It plays with your mind. It uses your emotions against you.
In this article, I’ll show you how the market fools you. So, you stop falling for its games.
And finally start playing to win.
Unstructured Environment
Imagine this—God Himself comes down to Earth, stands before you, and gives you an incredible power.
For the next 24 hours, you can do anything—with no rules, no restrictions, and no punishments.
You could rob a bank if you wanted. You could hurt someone, and no one would stop you. You could walk into a restaurant, take whatever food you want, and leave without paying.
Now, what would you do?
Maybe you wouldn’t steal. Maybe you wouldn’t hurt anyone.
But if you’re hungry and there’s a long line at a restaurant, would you still wait?
Or would you cut the line, walk straight to the front and think, “It’s just a small rule. It doesn’t really matter. I can break this rule once.”
This is human nature. When there are no punishments, people don’t follow rules.
Now, think about the stock market.
When you open a demat account and start trading, the market gives you that same unlimited power.
You can buy any stock. You can sell anytime. No one asks you if you’re ready. No one tells you if your decision is right or wrong. You feel like you’re in control.
But that’s the trap.
In every other profession, there are rules. A doctor must follow proper procedures before surgery. A pilot must go through a checklist before flying a plane. If they don’t follow the rules, things go terribly wrong.
But in trading? No rules. No checklist. No structure.
Market gives you the unstructured environment. And that’s how the market fools you.
Now, look at successful traders. They don’t fall for this trap.
They don’t trade randomly. They don’t act on emotions. They have clear rules—when to buy, when to sell, and how much to risk.
They have built their own structure in an unstructured world. And that is why they are profitable.
If you want to become a profitable trader, then you have to go from an unstructured environment to a structured environment.
An unstructured environment means there are no rules. You do whatever you want, whenever you want. You buy and sell based on how you feel.
A structured environment means you have clear rules. You only buy and sell when your rules say so. Your decisions are planned—not random.
You have to set clear boundaries for yourself. Make your own rules for trading and trade only when those rules are met. That’s the only way to become a profitable trader.
Random Nature of Stock Market
Let’s assume you finally found a winning strategy. A strategy with a 50%-win rate and a reward-to-risk ratio of 2:1.
It has a positive expectancy. It should make money in the long run.
After 100 trades, you expect to win 50 times and lose 50 times. If you risk ₹1000 per trade, every win gives you ₹2000, and every loss takes away ₹1000.
Fifty losing trades? You lose ₹50,000.
Fifty winning trades? You make ₹1,00,000.
Net profit? ₹50,000.
It all makes sense. The math is clear. You believe in it.
Your first trade is a winner. You pocket ₹2000, and it feels amazing. Confidence surges through you. “This is it,” you think. “This strategy will make me rich. I’m on my way to becoming a crorepati!”
The second trade comes, and it’s a loser. You lose ₹1000. It stings, but it’s fine. You remind yourself, “Losses are part of the game. I still have ₹1000 in profit.”
The third trade—another loser. Another ₹1000 gone. You frown but shake it off. “It happens. Two losses in a row, no big deal.” You’re back to breakeven, but you’re still calm.
Then the fourth trade comes. Another loser. Now the frustration starts creeping in. “Three losses in a row? That’s unusual.” You’re down ₹1000. You force yourself to stay rational. “The strategy works in the long run,” you whisper.
The fifth trade. Another loss. ₹2000 gone. Now, the frustration turns into doubt. “Maybe this strategy isn’t as good as I thought. Maybe I missed something. A real winning strategy shouldn’t lose four times in a row.”
You take the sixth trade. This time, you pray. You tell yourself, “This one has to be a winner.” You click buy. The trade plays out. And then—another loss.
Five losses in a row. ₹3000 gone.
Now, the emotions take over. Anger. Confusion. Self-doubt. “This strategy is broken. This isn’t supposed to happen!”
You can’t take it anymore. You quit. You throw away the strategy.
And that… was your biggest mistake.
You were fooled by the random nature of the market.
You had a winning system. It would have made you money over 100 trades. But you never let it play out.
You let short-term randomness shake your confidence.
The stock market doesn’t distribute wins and losses evenly. Losses come in streaks.
If you had just kept going, your winners would have arrived.
But you didn’t. And that’s why you failed.
When you trade with a 50%-win rate, you expect a neat, predictable result. Win, loss, win, loss—like clockwork. It feels logical. It feels fair.
You think the market should give you something like this:
WLWLWLWLWLWLWLWLWLWLWLWLWLWLWLWLWLWLWLWL
One win, one loss. A perfect rhythm. A balance.
But the market doesn’t care about your expectations. The reality is brutal. It looks more like this:
WLLLLLWLWWLWWWWWLLWWLWWLLLWLLLLLLWWLWWWW
Chaos. Streaks of losses. Streaks of wins. No mercy.
And this is where most traders fail.
After five losses in a row, panic sets in. Doubt creeps in. “My strategy is broken.” “Maybe I need to tweak it.” “Maybe I need a new indicator.” “Maybe I should stop trading.”
But what if I told you… five losses in a row mean nothing?
Five losses don’t mean your strategy is bad. They don’t mean you made a mistake. They don’t mean you need to change a thing.
The problem is not your strategy. The problem is your perspective.
You are judging your strategy based on a handful of trades. But the stock market is not a game of 5 or 10 trades. It’s a game of 50, 100 trades. You need a large enough sample size before making any judgment.
So how many trades do you need before deciding if a strategy works
In my experience—at least 30.
If you are still losing money after 30 trades, then yes, something might be wrong. But if you are panicking after 8 or 10 trades, you are being fooled by randomness.
The market is unpredictable in the short term, but in the long run, market is predictable. If you have an edge, the money will come. But only if you stay in the game.
So don’t quit after a few losses. Don’t tweak a strategy that is not broken.
Stay the course. Keep trading. The money will follow.
Keep Learning
Next Lesson: How Your Own Mind Fools You