Let's talk about one of the most important concepts in trading - stop-loss

Many people, when faced with losses,

can manage to stop-loss when the loss is within 20%. Most people can do that, but once the loss exceeds 50%, the first instinct is to average down, because having already lost half, it's hard for the subconscious to accept the stop-loss. At this point, the idea of averaging down tends to overshadow the thought of stopping the loss.

This is why many people in the crypto space can see losses of 80%-95%, almost to zero. It's not that they can't understand the trend; it's that when they lose too much, their minds start resisting the trend. Losing too much makes it easy to stop-loss at the lowest point, creating a sense of luck, ultimately leading to greater losses.

When losing, they stubbornly hold on; when they just make a little profit, they rush to sell, not looking at the trend or trading volume, only focusing on the profit and loss ratio of their account. What’s the result? They lose terribly when the market goes down and gain only a meager profit when it goes up. It should be the other way around: hold on when in profit, and quickly stop-loss when in loss.

My principle for taking profits and losses is very simple: take profit at 15%, and if it retraces to 10%, I will take profit; if it continues to rise, I will keep holding on and let the profits run. Conversely, if it drops after buying and the loss exceeds 5%, I will decisively stop-loss.

As long as you can take profit at 10% every time and control losses at 5%, even if you operate 100 times with a win rate of only 50%, your returns can reach 300%. Is it difficult? The hard part isn't the method; it's whether you can overcome your own greed and fear.