Why You Should Learn to Cut Losses in Time 🔥🔥🔥
Market conditions change rapidly, and rather than getting deeper into the mire of losses, it's better to decisively cut losses and start anew. Cutting losses is not failure; it is a smart exit strategy that preserves strength and waits for better opportunities. Those who understand how to cut losses can go further in the crypto world.
Avoid Unlimited Losses
Just like when a house is on fire, getting out immediately is more important than saving furniture. In the stock market, when the trend turns bad, each additional day of holding can exponentially increase losses — for example, when a stock hits a continuous limit down, cutting losses a day earlier could save you 20%. This is the survival logic of using a "small pain" to avoid "amputation."
Break Free from Emotional Traps
After being trapped, the constant fantasy of "bouncing back to break even" is essentially being controlled by unwillingness. There were investors who stubbornly held onto negative oil prices during the oil futures incident, ultimately owing the bank principal — when greed and fear take over decision-making, the stop-loss line becomes the only rational anchor point, helping you escape the vicious cycle of "the more you lose, the more you gamble; the more you gamble, the more you lose."