The Pain of Profit Drawdown: Standing Guard on the Summit Under Human Weakness

Have you ever experienced:

Turning 5000 into 30,000 and feeling like a 'Stock God', but when the account soars to 100,000 and then drops back to 30,000, the sense of despair far exceeds the loss of principal? Why is profit drawdown more deadly?

1. Psychological Account Trap: You Are Overdrawing the Future

When the account moves from 5000 to 30,000, the subconscious has already regarded the profit as 'earned', planning for a new car, down payment. During a drawdown, you are losing not just the 70,000 difference, but also future expectations. The pain of this 'deprivation of expectation' far exceeds direct losses, like a canceled trip that you were looking forward to.

2. Greed Spiral: The Out-of-Control Starting Point

When there are small profits, one is cautious and takes quick profits; after there are significant profits, one becomes arrogant:

Turning off stop-loss orders, superstitious about trends

Going all in on popular stocks, fantasizing about getting rich

Frequent portfolio adjustments, treating it like an ATM

In the end, you are controlled by greed rather than controlling the market.

3. Protecting Profits: From Gambler to Hunter

Experts understand: To hold onto profits is to hold onto the territory.

Stepwise Profit Taking: Profit 50%, take 30%; profit 100%, then take 40%; set a trailing stop for the remaining 30%. The market has no shortage of opportunities, only lacks real money taken away.

'Floating Profit to Zero' Awareness: Unclosed profits are just numbers; the market can reclaim it at any time. Distinguish between 'principal safety cushion' and 'risk gaming capital'.

Drawdown Circuit Breaker Mechanism:

If the single-day drawdown exceeds 5%, pause for 24 hours

If the weekly drawdown exceeds 15%, liquidate and rest for a week

If the monthly drawdown exceeds 30%, exit and review

What is being cut off is not the account, but the uncontrolled emotions.

Conclusion: The Practice of Volatility

Trading is a game with one's own human nature:

Do not despair over drawdowns, but calmly review

When greed surges, be able to press the pause button

Understand: Turning 5000 into 30,000 is luck; holding onto 30,000 is skill; rebounding after a drawdown is the way of trading.

Cultivate a calm mind: Live long enough to laugh at the end.

I am Judge Master, focusing on cryptocurrency market analysis and practical strategies, speaking through candlesticks! Follow me to not get lost, let's gain insights into the market opportunities together!