Analysis of Fear and Greed in Trading

Fear and greed are omnipresent in every aspect of trading! It cannot be completely denied. There are beneficial aspects, as well as harmful ones. The right approach is to know how to discard and how to utilize such emotions.

Upon reflecting calmly on the emotional fluctuations during the trading process, I surprisingly found that during unrealized gains, there is fear within! Fear of loss! Conversely, during unrealized losses, the mind is rather calm, especially for trades that one is confident about (note: this is merely one's own belief that the trade is correct), during unrealized losses, greed arises instead, leading to increased positions to lower the cost! The fear and greed generated in the above two scenarios are harmful! They violate the trading logic of “cut losses and let profits run”!

However, sometimes, when there are unrealized gains in trading, we may feel greedy, wanting to gain more! When there are unrealized losses in trading, we may feel fear, worried about losing more! As long as we grasp a certain degree of these two scenarios of fear and greed, they can actually be beneficial for trading profits! Because they align with the trading logic of “cut losses and let profits run”!

Everything has both positive and negative sides; the key is how to utilize them well! #加密ETF申请热潮涌现