The mentality of most investors often changes with the state of profit and loss:
When making a profit, they tend to lock in profits and avoid losing gains, which reflects a mentality of being satisfied with the status quo; when facing losses, they often feel unwilling and may choose to take risks because they are unwilling to accept losses, hoping to reverse the situation.
This mentality of being more sensitive to losses than gains, that is, the unhappiness brought by losses far exceeds the happiness brought by gains, is often the psychological root cause of investment mistakes.
In trading, a common behavior pattern is: procrastination when it is wrong and eager to exit when it is right. But this is contrary to the ideal trading principle-sticking to correct decisions and correcting mistakes in time.
To invest successfully, we must establish a correct concept of profit and loss and overcome human weaknesses. Only in this way can we gain an advantage in the market.
Everyone should focus on the areas they are familiar with, make careful plans, be patient, and stick to strategies to resist irrational market fluctuations.
Finally, reflect on three key questions to examine your investment status:
1⃣️Are you currently making a profit or a loss?
2⃣️What are your true feelings?
3⃣️Can you develop a more comprehensive investment strategy for yourself?
By thinking deeply about these questions, you can understand your investment behavior more clearly and make more reasonable strategic adjustments.