$ETH Why do I always say that after making a profit in trading, you must withdraw your funds?

Because many people, once they make a profit, want to keep rolling the snowball and increase their positions more and more. However, some of the smarter traders I know will take out a portion of their profits first.

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

People tend to mentally divide their money into different 'accounts'; they spend their salary money cautiously, while money earned from trading feels like windfall gains, making them more willing to gamble and take risks, as if money isn't really money at all.

As a result, the profits that were originally earned can easily be lost impulsively, even risking the principal.

So, when we make a profit, we should withdraw our funds and use real money to buy something we like. This way, we have a better understanding of money and won't just treat it as a number.