Overcoming the "holding on to losses and running away when making a little money": Unlocking the psychological shackles of trading

In the trading market, we often encounter a phenomenon: when the investment loses money, we tend to hold on to it, but when there is a slight profit, we are eager to cash out and leave. This behavior of "holding on to losses and running away when making a little money" actually stems from the fear and greed deep in our hearts.

Psychologists point out that people are often more disgusted with losses than they are with gains. In other words, the pain of losing 100 yuan is far greater than the happiness of picking up 100 yuan. This psychological phenomenon is called "loss aversion". In the trading market, loss aversion often leads us to make wrong decisions. When the account has a floating loss, we are unwilling to admit and accept this loss, so we choose to hold on to it, or even blindly increase our positions to try to recover the loss. When the account has a floating profit, we are eager to protect and enjoy this profit, and we are worried that the price will fall and the profit will disappear, so we hurriedly stop profit and exit the market.

This impulsive and impatient trading habit will undoubtedly limit our gains and magnify losses. It is like an invisible shackle that binds our trading thinking and behavior. So, how to overcome this psychological weakness of human nature, do reverse operation, and return to the true nature of trading?

In fact, the method is not complicated. The key is to establish a scientific, reasonable and effective trading system and strictly abide by it. A good trading system should include clear opening points, stop loss and stop profit points, position management and risk control rules. These rules can help us stay calm and rational in trading and avoid being affected by emotions.

When we establish such a trading system and strictly abide by it, we will be able to gradually overcome the psychological weaknesses of human nature. We will learn to stop losses in time when we lose money to avoid further expansion of losses; when we make profits, we will be able to stay calm and let profits grow fully. In this way, we can unlock the psychological shackles of trading and realize the freedom and profitability of trading.

Remember, trading is a kind of practice. Only by continuous learning and thinking can we make continuous progress and surpass ourselves. Don't be driven by fear and greed, but use wisdom and discipline to guide our trading behavior.$BTC $ETH