At three in the morning, the moment the numbers on the screen hit zero, I suddenly understood—the market never makes mistakes, but human nature always does.
Watching my account balance evaporate from 50,000 USDT in an instant, I leaned back in my chair and surprisingly laughed out loud. The lesson I read last week in (Trading Psychology Analysis) that 'true risk control begins with preparation before opening a position' turned out not to be empty words, but a lesson bought with real money.
In this market, we always think we are battling the candlestick charts, but later realize that the real opponent is the impulses stirring within our own minds. The Craig Castle Hospital in the UK has long categorized cryptocurrency addiction alongside gambling addiction, and there is reason for this.
01 When 'certainty' becomes a trap.
I remember the time I saw abnormal on-chain data, and I opened a short position without hesitation. All indicators showed that the market had just experienced a crash, and the technical aspect was severely oversold, with a winning probability looking as high as 90%.
But the market behaves like a runaway wild horse, suddenly rebounding violently after a drop. I stared at the screen, silently repeating to myself, 'Wait a little longer; it will drop soon.' It wasn't until the stop-loss line was breached by 20% that I realized I had long been kidnapped by the illusion of 'certainty.'
This psychology is strikingly similar to a gambler continually chasing bets in front of a slot machine. Tony Marini—a former gambling addict who later became a therapist—described this state: 'Sitting in the front row at the betting table once felt like an honor; every time the cards turned, you'd think this time I should win big, right?'
Cryptocurrency addiction is similar to gambling addiction; both stimulate the brain to release dopamine, activating the 'reward circuit.' When we think we have mastered the market’s rules, we may just have become slaves to our own feelings.
02 Leverage magnifies the three major traps of human nature.
Leverage trading itself is not the problem; the problem is that it acts like a magnifying glass, exposing human weaknesses in stark detail.
The illusion of 'I know when to stop' is the first trap. There’s always a feeling that I can accurately grasp the closing point, but in reality, I am often dragged along by greed. The 24-hour trading and severe price fluctuations in the crypto market make stop-losses even more challenging.
The obsession of 'this time is different' is the second trap. I once shorted a certain DeFi project, clearly breaking the support level but stubbornly holding my position, resulting in a price surge. Later, I realized that the market is always full of stories; what it lacks is the courage to admit mistakes in a timely manner.
Research by Dan Cassino from Fairleigh Dickinson University found that young men who claim to highly value masculinity but feel traditionally insufficiently masculine have the highest ratio of holding cryptocurrencies and meme stocks. This psychology may lead them to be less able to admit mistakes.
The deathly hesitation of 'waiting and seeing' is the third trap. When the price approaches the stop-loss, there is always a fantasy of 'just give the market 5 more minutes.' But the crypto market never gives anyone a chance for a remedy, much like the accelerator on a highway; the moment you floor it, the outcome is already sealed.
03 My three trading military rules.
After a loss of 50,000 USDT, I set three ironclad rules for myself.
Setting a 'stop-loss order' as soon as you open a position is the first rule of trading. As Gann suggested in (Forty-Five Years on Wall Street): 'Always set a stop-loss order 3 to 5 points away from your execution price.' I set the stop-loss as a default option, like fitting every trade with a fuse.
Using the 'half position stop-loss method' during volatile periods is the second rule. When the market is in severe turbulence, triggering a stop-loss to close half the position preserves some gains while relieving psychological pressure. This aligns with the risk control philosophy of Dong Weiwei from Western Asset Fund: 'On a highway with good conditions, the driver can drive at high speed... Once conditions deteriorate, safety must come first.'
Establishing a trading error log is the third rule. Before opening a position, force yourself to answer three questions: What if there's a reverse fluctuation? Where is the stop-loss point? What is the worst-case scenario? Then write these answers down on paper—not to archive, but to tear them up. This action symbolizes the release of psychological burdens.
04 The essence of trading is self-management.
Last week a fan asked me: 'Teacher, how do you stay calm during a crash?' I countered, 'Have you ever seen a diver thinking about the movements in mid-air?'
True trading experts have internalized discipline as muscle memory. Those who stay up late analyzing indicators in front of the candlestick charts often overlook the most important thing—fitting a firewall for their own humanity.
The treatment recommendations provided by Craig Castle Hospital for cryptocurrency addicts include 'spending more time with family or friends unrelated to cryptocurrency.' This reminds us that a balanced life is the cornerstone of sustained trading.
The scariest thing about the market is never the price fluctuations, but rather our arrogance in believing we can conquer human nature. The core of risk control is not technical analysis, but learning to recognize the impulses and fears within ourselves.
Now, whenever I feel my adrenaline spike (that’s the gambler’s excitement described by Tony Marini), I ask myself: Is this a rational judgment, or just a desire to escape reality?
Because what we trade is not just numbers, but our own inner demons. Follow Xiang Ge to learn more firsthand information and precise points about the crypto world, becoming your navigator in the crypto space; learning is your greatest wealth!
