Why do 99% of retail investors end up facing liquidation after holding their positions? Should we cut losses or hold on during trading?

Today, let's talk about this issue.

The answer to this question is actually very simple; you will understand after holding on through a dozen trades.

Holding a position once, the market moves as you wish and returns, resulting in no loss and even some profit. You feel that you did well this time.

Holding a position three times, the market moves as you wish and returns, and the profit is not bad. You feel that holding positions doesn't seem so terrifying; 80% of the market is volatile, and it comes back if you can endure it.

Holding a position five times, the market has moved too far in the opposite direction, with a sense of it being irretrievable. You become fearful, feeling that the market won't come back, and thus you have to cut your losses. A single cut consumes all the profits from the previous four trades and results in a loss (taking methanol as an example, you dare to hold when it fluctuates 50 points, but when it moves 200 points against you, see how you feel; do you still dare to hold?).

Holding a position ten times, the market moves against you, and you are unwilling to accept it, so you add to your position, but your additional investment has no effect, and the market continues to move in the opposite direction. Then you watch the losses grow larger, unsure of what to do, and after struggling for a few days, you see that your account losses reach a certain level, and you have to cut your position. At this stage, not only have you lost money, but you've also lost the desire and confidence to make money.

Perhaps after holding through ten trades, you have learned a lesson, or perhaps you haven't learned anything.

If you haven’t learned a lesson, after holding through ten trades and continuing to endure, the eleventh time is fine, the twelfth time is fine, and maybe even the twentieth time is fine, but by the fiftieth or one hundredth time, the final outcome will definitely be the same: liquidation.

In this market, the only reason for significant losses is holding positions. Because the mindset of holding does not matter if you are right ninety-nine times; if you are wrong once, all the previous ninety-nine trades will be lost. (Of course, in most cases, you work hard for a month to earn 20%, but then lose 40% in just two trades at the end of the month).

As long as you stay in the cryptocurrency market and continue to hold positions, the final outcome will only be one: liquidation.