We have a flaw in our brains—especially fond of forcibly finding "patterns" in random events.

Random processes naturally produce sequences that look very patterned. It’s precisely because of this that our ancestors’ instinct to "seek causal relationships" gave them a survival advantage. Imagine on the African savannah, lions could appear at any moment, but if you can notice that the frequency of lion appearances is increasing, taking action in advance would be safer—even if this "upward trend" is actually just a false illusion caused by random fluctuations. This survival instinct has been passed down to us and still quietly influences our decisions today.

Casinos are all too aware of this. The game of baccarat works like this: each round is an independent random event, but the casino thoughtfully displays the results of each round on the screen. Watching these historical records, your brain automatically starts looking for patterns—banker, player, banker, banker, player—so the next round seems like it should be a player, right?

But honestly, each round is completely random. Past results have no impact on the next one. The display is just there to tempt you into thinking otherwise. The same principle applies in trading markets—price fluctuations are full of randomness, but we always want to find patterns to guide our next move. Recognizing this is the first step toward proper risk management.