Here's how it happens:
1. Percy challenges Ares to a duel. (Page 196)
2. Ares is confident and arrogant, underestimating Percy. (Page 197)
3. Percy uses his water manipulation powers and the environment to his advantage. (Page 197-199)
4. Percy creates a "pool of fire" around Ares, trapping him and making him think he had won. (Page 198-199)
5. Ares, believing he had won, retreats in anger. (Page 199)
6. Percy reveals he's not hurt and actually had outwitted Ares. (Page 199)
Percy's victory is less about brute force and more about strategic thinking and using his powers creatively.