In the world of cryptocurrency investing, big profits are what everyone aims for. But there is a much more important survival skill – cutting losses at the right time.

It sounds simple, but this is a psychological barrier that causes many people to leave the game. They hold on to their coins until the bottom, hoping the price will turn around, and then lose everything. So how can we learn the art of cutting losses at the right time – and keep our capital to continue?

1. Why cut losses?

Remember: keeping your capital is more important than making a profit. If you lose all your capital, you will have no chance to correct your mistakes. Cutting your losses is not a defeat – it is a way to keep your chance to win next time.

For example: You buy a coin at $1,000, the price drops to $800. If you don't cut it, it could go to $400, $200, or even $50. But if you cut it early at $900, you only lose 10%, and have enough money to turn around when the market recovers.

2. Set a stop loss – discipline is life and death

Don't wait until the hole is deep before you start... shaking your hands. As soon as you enter an order, you should determine your stop loss point in advance.

Common stop loss levels: 5–15%, depending on risk appetite.

If you are new, set low to protect your account.

Use support tools such as Stop-Loss Order on the platform to automatically cut when reaching the threshold.

Tip: Place your stop loss below the support zone, but avoid placing it too close, as slight fluctuations can cause you to get dumped unnecessarily.

3. Don't let your emotions control you

This is the fatal flaw of 90% of failed investors: false expectations and desperate waiting.

  • FOMO Psychologymakes you not want to sell at a loss, for fear... "it's about to go up again".

    Psychology of holding lossesmakes you think: "If you don't sell, you won't lose!"

Truth: When prices fall, the market is telling you that your analysis is wrong. Don't try to prove yourself right. Have the courage to admit your mistakes and exit at the right time.

4. Learn from stop loss orders – Don’t just “delete the app” and look away

Cutting your loss is not a failure. It is a moment when you learn something:

  • Are you entering orders too quickly?

    Where does technical analysis go wrong?

    Are you affected by emotions or other people?

Keep a record of your trading history and keep a trading journal to learn from yourself. This is what professional traders always do.

5. When should you not cut your losses?

Not every red day means you have to sell. Cutting losses requires logic and discipline, not panic:

  • If you are in it for the long term and the coin you choose has a good fundamental, a short term drop could be an opportunity to buy more, not a reason to cut.

    However, only keep it when you really understand the project and have a clear long-term plan.

Summary:

Cutting losses is not easy – but it is a vital weapon. Don’t be a loser because you are afraid to cut your losses. Be a winner because you protect your account, protect your spirit, and keep a cool head.

The market is still there, there are still many opportunities. The important thing is that you still have money and the sense to seize the opportunity.

Have you ever cut your losses? And how did you feel at that time?

Let's share to learn together and become a more confident trader!