Why do I always say that after making money in trading, you must withdraw your profits?

Because many people, once they are profitable, think about continuing to snowball their profits and increasing their positions. However, some of the smarter traders I know will withdraw a portion of their profits first.

This is to guard against a psychological trap: the mental accounting effect.

People tend to categorize their money into different 'accounts' in their minds, being very careful with their salary, while treating money made from trading as windfall gains, making them more likely to gamble and take risks, as if the money isn't real at all.

As a result, the profits that were originally earned can easily be lost in a moment of impulse, potentially even losing the principal as well.

Therefore, when we make a profit, we should withdraw it and use real money to buy something we like, which helps us have a better concept of money and not just treat it as a mere number. #交易心理