Most traders gradually incur losses or even empty their portfolios, appearing to be the 'fault of market fluctuations,' but the more core issue lies in their trading habits and thought patterns. The thrill of trading can easily lead people to overlook the underlying logic—what truly destroys an account are often those neglected 'common mistakes.'
The first pit: overtrading, mistaking 'high frequency' for 'high efficiency.'
Many people always think 'number of trades = number of profits,' staring at the K-line back and forth as soon as the market opens, even forcing themselves to find trading opportunities just to 'not be in cash.' But in reality, every unnecessary trade adds a bit of risk: transaction fees and slippage can quietly eat into profits, and frequent decision-making can drain energy, leading to mistakes in critical judgments later.
Traders who can truly stabilize profits are often very 'lazy'—they wait for 'strong enough signals,' such as patterns that fit their strategies or breakthroughs at key support and resistance levels, rather than chasing every small fluctuation. Overtrading is essentially 'masking thought with action,' and often ends up exhausting the principal in a cycle of 'small wins and big losses.'
The second pit: not managing risk properly is equivalent to running naked.
Many people think only about 'how much they can earn' when trading, but never consider 'how much they can lose'—not using stop losses, fully loading positions, and betting a large part of their capital on a single trade are essentially 'gambling on luck.' It's like sailing without an anchor; when encountering wind and waves (sudden market movements), it’s easy to capsize: one losing trade could wipe out the profits of the previous few weeks, or even lead to a total account liquidation.
Remember: 'surviving' in trading is much more important than 'making quick money.' Even if you make money 9 times, if you don't control risk once, you could give back all your profits. Setting stop losses and controlling the position size (for example, not exceeding 5% of total capital for a single trade) are not 'restrictions,' but a 'safety net' for protecting the account.
The third pit: letting emotions be the 'steering wheel,' while strategy becomes a decoration.
When the market rises, greed takes over, thinking 'just wait a bit longer, it can rise more'; when it falls, panic sets in, fearing 'if I don't sell now, I will lose everything'; after losing a few trades, one rushes to 'make up for losses,' stubbornly holding onto losing positions... These emotion-driven actions can render even the best strategies ineffective.
For instance, seeing a certain cryptocurrency suddenly surge without analyzing the pattern or calculating support, rushing in just because 'everyone is buying,' and ending up at a high point; or knowing that the stop loss level has been reached but unwilling to 'hold on a bit longer,' eventually turning a small loss into a big loss. In trading, emotions are the biggest 'noise'—stabilizing your mindset and entering and exiting according to the plan already puts you ahead of half the traders.
The fourth pit: chasing highs and 'picking up the pieces,' falling into the 'retail trap.'
When a cryptocurrency rises by 30% or 50%, and the group is all shouting 'it can rise further,' the retail investors rushing in at that moment are often just 'giving their heads to the big players.' One must understand that when the market is soaring, the big players may have quietly sold off their holdings, and the 'heat' that retail investors see may just be a 'bait' intentionally set by them.
Just like some previously popular altcoins that suddenly skyrocketed, attracting retail investors to chase the rise, only to start retracing as soon as they entered, trapping a large number of people. The real opportunities often occur 'when no one is paying attention,' not 'when everyone is shouting bullish'—chasing highs is betting on the 'current heat' for the future, which is likely to lead to pitfalls.
The fifth pit: trading without a plan is no different from gambling.
Many people trade solely based on 'feelings': not knowing why they enter a position, not knowing where to take profits, not knowing how much to stop loss, and determining position size based on 'mood.' Such unplanned actions are no different from buying a lottery ticket with eyes closed—occasionally winning is luck, but over the long term, the odds are certainly against you.
Real trading should be 'plan first, execute later': for example, 'going long at the $4000 support level, stop loss at $3900, target at $4200, using 10% of the capital for a single position.' Each step is clear, and even if the market doesn't meet expectations, you can stop loss according to the rules without losing your composure. Without a plan, you are essentially handing your account over to 'randomness,' and losing everything is just a matter of time.
Ultimately, trading is not about 'who wins more times,' but 'who lasts longer.' There are always opportunities in the market, but the prerequisite is that you must have capital to 'wait for opportunities.' Control your trading frequency, adhere to risk management, maintain a stable mindset, avoid chasing highs and picking up the pieces, and operate according to the plan—if you can do these few things, your investment portfolio will not be 'quietly destroyed,' but will instead slowly accumulate profits amidst the fluctuations.$ETH
