2026-01-13 20:10:38

Do we traders in the crypto world all have a common flaw—wanting to run when we make profits and holding on stubbornly when we lose? Take a look at your trading records—does it hit close to home? Among holders of coins like $BROCCOLI714 and $BREV, how many are caught in this cycle of repeatedly stumbling?

Behavioral finance has given this phenomenon a name called "Disposition Effect." It sounds fancy, but it’s actually a trap rooted in human nature. Simply put, it describes investors’ tendency to sell winning positions too early while holding on to losing ones unwillingly.

Where does this come from? The fear of losses is much stronger than the desire for gains. Research shows that the psychological pain of losing $100 might require gains of $150 or more to compensate. This innate psychological imbalance is vividly reflected in trading decisions.

Another accomplice is called "Cognitive Dissonance." When you were so confident before buying, but the market moves in the opposite direction, that uncomfortable feeling can be explosive. To alleviate this discomfort, many people selectively ignore bad news or even double down to prove they were right initially. In the end? Losing positions grow heavier and harder to escape.

How powerful are these two psychological traps? They make you panic and cut your profits when the trend is favorable, yet cling stubbornly to losing positions. Not only do you eat into your principal, but you also waste time and energy, watching better opportunities slip away, and your mindset collapses.

What to do? Build a strict trading system.

Before trading, set fixed numbers for take profit and stop loss, then follow the rules strictly—don’t give yourself room to bargain. Second, learn to be flexible—markets never wrong, only your judgment is. Once you realize you’ve misjudged the direction, you must exit decisively—don’t hope that "the market will eventually prove me right" as a fantasy.

True trading masters not only buy the dip and sell the top but also have the courage to admit mistakes and decisively acknowledge errors. Before mistakes turn into deep pits, keep losses under control. That’s the path to steady trading.

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ImpermanentPhobia

· 3h ago

To be honest, I'm tired of that psychology stuff already. The key is execution, brother. Just setting stop-losses isn't enough. When it really comes down to the critical moment, you still can't sell when you need to.

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GasFeeLady

· 3h ago

yo this dispostion effect thing hits different when you're watching gwei spikes during your exit window... like yeah people panic sell winners but honestly? timing the optimal gas price on your exit is half the battle nobody talks about. seen too many degens eat slippage while emotionally bagholding, that's the real MEV tax. discipline > copium, always been the move.

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SmartContractRebel

· 3h ago

That's so true, I'm the one who keeps struggling and falling again and again. --- Talking about stop-loss on paper is easy, but when it comes to actually cutting losses, it's hard to let go. The mindset of loss aversion is the most deadly. --- I held on for three months during that $BROCCOLI714 wave, now that I think about it, I was just out of my mind. --- The term "disposition effect" sounds sophisticated, but it's really just a mix of greed and fear. --- Every time I said I would strictly follow the system, I would start self-deception again when I looked at the K-line. --- Cognitive dissonance is incredible; to prove myself right, I end up losing even more by going against my judgment. --- The key is to admit mistakes quickly. I now realize that closing positions immediately after realizing a mistake saves so much time and effort compared to holding on. --- Quickly rushing to take profits after earning a little, and trying to recover losses when losing—that's a common problem among retail traders. --- I skipped the $BREV trap, now I set stop-losses first before placing orders, and the psychological pressure is much lower. --- A strict system really saves lives; otherwise, it's easy to be hijacked by emotions.

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GasFeeAssassin

· 3h ago

Losing 100 bucks and feeling the psychological pain of needing 150 bucks to make up for it... This sentence hit me hard. I've been cut many times like this and ended up being a bunch of chives. Saying "take profit" and "stop loss" is easy, but when that moment comes, the brain can't process the signals. You have to wait for a rebound. Bottom fishing is easy to mistake, and that's the truth. Seeing those guys at BROCCOLI714 still waiting for a rebound, I knew they are doomed.

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HypotheticalLiquidator

· 3h ago

In simple terms, it's a failure of mental resilience. I've seen too many people hold onto a coin stubbornly, watching it drop from a high point to the floor, still saying "wait for the rebound." Poor risk control thresholds can lead to chain liquidations in the end.

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CryptoCrazyGF

· 3h ago

Well... that's true, but when it comes to cutting losses, who isn't trembling? Knowing what to do is easy, but actually doing it is hard, old buddy.

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TommyTeacher

· 3h ago

Ha, that hits too close to home... I'm the type who makes a little profit and then runs, holding on stubbornly through losses. After reading this article, I really need to reflect.

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