How to avoid falling into the 'loss trap' in investments?

In the investment process, many people face a common issue: after making a small profit, it is easy to let their guard down and end up neglecting to lock in profits. On the other hand, some individuals hold onto the mindset of 'next time will be better' when facing losses, continuing to increase their investment, ultimately turning a small loss into a significant one.

In contrast, some traders can promptly lock in profits during an uptrend, while others stubbornly 'hold on' during a downturn until the market completely reverses, only to realize they should have cut their losses earlier.

Buying is straightforward, but selling is often challenging. Especially when the market experiences volatility, many people think, 'This time will be different; the next wave of market movement is coming.' As a result, after waiting repeatedly, they often miss the best exit opportunities. In fact, the real issue lies not in whether one can buy, but in how to make the right decisions when in profit.

So, how can we avoid this 'loss trap'?

First, it is essential to have a clear plan, knowing when to enter and when to exit. For example, when the market shows profits, consider transferring a portion of the earnings to a cold wallet while investing another part in more stable projects. This way, the money you earned won't be easily taken back by market fluctuations but will remain in your account.

The key to success lies in avoiding being driven by 'greed,' maintaining discipline, and focusing on a few potential projects rather than blindly choosing from a multitude of cryptocurrencies. While diversification may seem to reduce risk, it often leads to confusion and missing out on real opportunities.

Finally, the most crucial point is to learn how to lock in profits. There is no perpetual uptrend in the market, nor is there a continuous downtrend. Every time you are in profit, you should make decisive decisions instead of holding onto the hope of 'next time will be better,' only to regret it when faced with losses.

In summary, success is not solely about which cryptocurrencies you choose but rather how you manage your profits. Knowing your goals and strictly adhering to your investment strategy is the secret to long-term stable profits.

As an experienced cryptocurrency investor, I share my experiences and insights for free. Interested in the crypto world but don't know where to start? Follow me to see my insights.