I was wrong. I believed that BTC would drop sharply when approaching the 95k - 97k USD range and that the game needed a reset. I took a risk of 6% instead of 2% of the total account for this trade because I thought the market was just trying to "stretch" a bit before collapsing. But the market does not care about my "certainty".
Pressing the cut-loss button is not easy.
It's like closing the door yourself when you still want to move forward. But this is a principle I must adhere to, because I understand:
• Cutting losses is not to prove oneself right, but to protect capital.
• A wrong trade does not bankrupt you, but not adhering to principles can cause you to lose everything.
Why cut losses even though it is very painful and still believe that BTC will not reach the old peak again?
1. Preserve capital for better opportunities: This losing trade accounts for 6% of the account. If not adhered to, it could double or triple, and you would have to stop trading.
2. Maintain a strong mindset: Not cutting losses at the right time, useless hope will paralyze you. Cutting losses helps you escape from a negative mental state to view things clearly.
3. The market is always right: The market does not operate according to personal expectations. I was wrong at the entry point and accept that instead of trying to prove myself right.
Adhering to the cut-loss principle is a discipline test that every trader must face. If you feel pain when cutting losses, it proves that you still have "market blood"—there's still a chance to succeed in the future.
"Winning or losing is not as important as whether you are following the plan. Because a good plan will save you from the biggest mistakes."