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In three years of trading experience, I gradually discovered that the real reason retail investors fail when trying to catch the bottom is not due to "bad luck," but rather because they often fall into several psychological traps that prevent them from accurately understanding the true state of the market. Today, I will delve into these psychological traps and propose solutions.

Misconception 1: Over-reliance on historical highs - using the wrong "reference frame"

When the price of Bitcoin dropped to $90,000, many investors' first reaction was often: "A 29% drop from $120,000, isn't that cheap?" or "It was still $126,000 in October, if I don't buy it at $90,000 now, when will I buy it?" This is a typical manifestation of over-reliance on historical highs. Most people tend to use historical highs as the basis for determining whether to "catch the bottom," but the market does not care about past prices, only the current supply and demand dynamics and emotional fluctuations.