Why do 80% of retail investors lose money when trading with this big influencer?

In the trading market, the herd mentality is like a crazy "follow-the-trend game".

82% of retail investors' losses come from the "herd mentality".

This is from an analysis by HSU, a professional trading statistics agency on Wall Street.

Especially in the cryptocurrency space, the "pumpers" could be market makers, big influencers, or marketing accounts. They attract retail investors to follow their lead by making calls and generating hype, buying low and selling high, raking in profits.

🔺Take a common example:

For instance, one day you see in a group chat or on Twitter that everyone is shouting "This coin is going to skyrocket! Buy now!", and some even share screenshots of "I made 100,000 in a day".

At this moment, you are likely to think:

"If such a big influencer is buying, it must be right"

"If I don't buy now, I'll miss the chance to get rich"

So you neglect to research what this coin actually does, whether it has real value, and haven't even read its whitepaper, and you just jump in and invest.

The result is often: as soon as you buy, the price starts to drop — because the people who called the shots might have set up their positions long ago, just waiting for newbies to take over.

🔺Why is the herd mentality so severe in the crypto space?

Low entry barriers + chaotic information: Many people don’t even understand what the project is about and are drawn in by stories of "getting rich overnight", just following others.

Fear of Missing Out (FOMO): Watching others "make money" makes you uncomfortable if you don’t buy, even if the risks are apparent, you can't help but take a gamble.

Emotional contagion: Seeing someone in the group chat at midnight shouting "It's going to zero!", even when your position can withstand it, panic selling happens faster than rational thinking, and you end up selling at a loss.

Human weaknesses: People naturally like to flock together, thinking that "the choice made by the majority must be safe", but in a zero-sum game like crypto, the "majority" is often the target being harvested.

🔺How to break this? Remember this phrase:

When others are greedy, I am fearful; when others are fearful, I am greedy (it’s difficult to turn this around, but at least start by not following the trend to buy things you don’t understand).

Before buying a coin, ask yourself:

What real problem does this coin solve?

Why will it rise? Does it have real value, or is it just hype?

If it drops 50%, can I bear it?

If you can’t answer these questions, then tighten your wallet and don’t follow the crowd blindly.

There aren't that many "easy money" opportunities in the crypto space.