Watching the unrealized gains turn into unrealized losses, that heart-wrenching feeling, I believe every person in the crypto space understands.
That day, ETH broke through $3366, and my phone buzzed. Aya's voice message trembled: 'Teacher! I built a position at 3000, sold at 3300, made 10%, but now seeing it surge to 3366, I feel like I’ve missed out on almost 20!'
She almost cried: 'Last time I was even worse, I stubbornly held on at 3100 and didn’t sell, and it dropped to 2800, cutting losses. Teacher, I’m really going crazy!'
This scene is too familiar—making a little money but fearing to miss out, then fantasizing about breaking even after a loss. How many traders are caught in this cycle, ultimately exhausted, with their accounts not showing any growth.
I pointed out directly: “There is no perfect solution in trading; you and I can only choose between 'not making small profits' and 'not losing large sums.' My choice is clear: to give up small profits and focus on major trends.”
1. The painful cycle: why do we always make small profits and suffer large losses?
In the cryptocurrency market, traders like Aya are not uncommon. Fear and greed dominate the decisions of most people.
When prices rise, greed makes people hope for more, and once prices fall, fear makes them rush to sell; when prices drop, fear makes people afraid of expanding losses, while greed makes them fantasize about a price rebound, unwilling to stop losses.
This emotional cycle leads to a terrible result: making only a little when profits come, but losing a big chunk when losses occur. One large loss can wipe out the profits from ten small gains.
What is more terrifying is that we are in a 'inter-subjective space' — various voices on social media constantly amplify our anxiety. When we see others flaunting profit screenshots, we doubt our own strategies; when we hear panic news, we can’t help but want to follow the crowd.
2. My solution: two iron rules to cut off the vicious cycle
I asked Aya to anchor the oscillating trend of ETH in 2024, setting two iron rules:
1. Build positions at key support levels, 5% stop loss to prevent large losses
No longer chasing highs and lows, but patiently waiting for the price to drop to important support levels before acting. Once entering the market, immediately set a 5% stop-loss line, and resolutely execute it regardless of market fluctuations.
2. Take profits at least when it reaches 30%, ignore fluctuations within 10%
Change the habitual thinking of 'running when making 10%' and set a profit target of 30%. Ignore price fluctuations within 10%, avoiding being shaken out during volatility.
The core idea of these two rules is: use small, controllable losses to capture the real big trends. Missing opportunities is not scary; what’s scary is when the opportunity comes, you cannot participate because you have no capital.
3. Practical test: the battle between rules and human nature
In August, ETH stabilized after plummeting to $2111. Aya built a position at $2200, and three days later, the price rebounded to $2420 (a profit of 10%). She eagerly sent a message: “Let’s secure the profits! This market is too scary!”
I showed her the on-chain data at that time: ETF funds were continuously flowing in, and there were no signs of a decline in the staking rate. I told her: “This 10% profit is just bait; there may be a bigger trend ahead.”
Tests followed one after another. A week later, ETH pulled back to 2250, and Aya's profit shrank from 10% to just 2%. She sent five messages expressing anxiety: “If it drops further, it will trigger the stop-loss!”
I replied to her: “Remember our bottom line is not to lose large sums, not to miss small gains. The purpose of the rules is to let us truly make money in trending markets, not to catch every small fluctuation.”
In November, Trump's victory ignited the market, and ETH broke through 2860, with Aya's profits reaching 30%. She proactively told me: “Got it! I’ll take profit at 10%, losing the later 20% big gains.”
Human nature is hard to control, and change is not accomplished in a day. In December, she operated AI concept coins, taking profits at a 12% rise, only to miss out on the subsequent 30% increase. In January of the following year, when ETH pulled back, she once again forgot the stop-loss rule and stubbornly held until 2090, incurring a loss of 5%.
When she felt frustrated, I comforted her: “No one can execute principles 100% of the time; achieving six or seven out of ten can outperform most people. Trading is a game of probabilities, not a stage for perfectionists.”
4. The essence of trading: choices and cultivation
By the end of the year, Aya's capital of 20,000 U turned into 32,000 U. Although it didn’t double, her mindset underwent a fundamental change. She told me: “Now I understand, 'not making small profits' is not about stubbornly holding on, but exchanging the agony of the fluctuation period for the certainty of the trend.”
Over the past year, her greatest growth has not been the increase in account assets, but the maturity of her trading mindset:
Learned to wait, no longer trading frequently, and understood the principle that 'less is more';
Accept imperfection, no longer trying to buy at the lowest point and sell at the highest point;
Focus on the system rather than individual results; the gains and losses of one or two trades no longer affect her emotions.
The essence of trading is the art of choices — the more times you resist the urge to take profits, the more times you can receive the gifts of trends.
In the volatile cryptocurrency market, psychological preparation is more important than technical analysis. Only by understanding your psychological weaknesses and formulating corresponding rules to restrain yourself can you avoid being harvested by the market.
A true trading expert is not the one who predicts best, but the one who knows where they will make mistakes and sets up protective barriers in advance.
Today's ETH is still fluctuating continuously, but for traders who have already established a system, volatility is no longer a risk but a source of opportunity. After all, without volatility, where is the profit space?
The path of cultivation is long, but at least we have found the direction. Follow Xiang Ge to learn more firsthand information and accurate points about cryptocurrency knowledge, becoming your guide in the crypto world; learning is your greatest wealth!#巨鲸动向 #加密市场观察 $ETH
