What the elder brother said is very right, but many people, especially novices, cannot enter the market after selling out, which can be extended to the second point - the cost of silence is not considered a cost

Let's do a small question to see if you have trading thinking:

Xiao Shuai spent 110 to buy a chicken and sold it at 120 in the market. After selling it, he felt that the price of the chicken could still rise, so he spent 130 to buy the chicken back and finally sold it at 150. How much money did Xiao Shuai make in total?

A reminder, this involves two psychological concepts mentioned before - "ownership effect" and "loss aversion".

The answer is 30. The first transaction earns 10 yuan, and the second transaction earns 20 yuan. There is no need to offset the difference between the second purchase of chicken and the first sale of chicken, because that is not a loss.

Back to trading, people who make mistakes are basically people who are not likely to enter the market for the second time in trading, because they once owned the currency and activated their ownership effect, and the sale caused them to have loss aversion, thinking that the money that should have been theirs was gone, as if they had lost money, so they would not touch this currency again in the short term.

But transactions are done one by one. Your last transaction has nothing to do with this one. Each transaction is a new beginning. According to this theory, the more eager people are to make a profit, the less likely they are to make a profit, because they try to change the results of every past transaction with this transaction. The trading psychology will be distorted into greed and penny-pinching, and they will never be able to turn things around.