2025-12-15 06:14:20

Have you ever thought that our definition of "losing money" might actually be quite distorted?

For many people, the peak account balance is their psychological principal. As soon as the account net value slips below this peak, their mind starts buzzing with calculations—"I've lost money."

But this logic is flawed. The actual principal you invested is fixed. If the account drops from 200,000 to 180,000, that's the real loss. The problem is, many people went from a 100,000 principal to a 300,000 peak, and now that it’s back to 180,000, they feel they've lost a full 120,000.

The trap of psychological accounts lies here. The peak becomes a psychological benchmark, and any decline is amplified into a "failure." Your principal is still in the account; it’s just experienced fluctuations along the way.

Recognize what your true principal is, and don’t let the highest peak hijack your decision-making.

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CryptoNomics

· 2025-12-18 00:40

actually, the mental accounting bias here is just reference point theory with extra steps. if you actually ran a regression analysis on your trades against your peak drawdowns, you'd see the correlation matrix tells a completely different story than your feelings do.

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BlockDetective

· 2025-12-17 11:45

That's so true, it's really a matter of mental conditioning. Being too optimistic can actually be like poison.

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ZkSnarker

· 2025-12-16 04:58

honestly this is just mental accounting wrapped in trader psychology... the "anchoring to ATH" bit hits different when you're actually down 60% from your peak tho lol. like yeah technically you're only down from realized capital but try telling your brain that when you see the portfolio bleed

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DeFiChef

· 2025-12-15 06:43

That's right, we are indeed easily brainwashed by high points. I used to be the same. When it was 300,000, I thought I was the chosen one. Now that it's back to 150,000, I feel like I lost everything. Actually, the principal is only 200,000, and I'm still making a profit... I really want to slap myself.

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SchrodingerWallet

· 2025-12-15 06:42

Haha, you're right. That's exactly how I was tortured at the peak, always feeling like I lost 100 million.

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ShibaSunglasses

· 2025-12-15 06:37

I've seen through that psychological accounting trick long ago. Basically, it's just that the unrealized gains are too easy to make people euphoric. The real loss is returning to the principal; everything else is an illusion.

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MrDecoder

· 2025-12-15 06:32

That's right, I've been tortured by psychological highs like this. Dropping from 300,000 to 180,000 would really drive me crazy.

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AirdropworkerZhang

· 2025-12-15 06:31

Damn, this is the reason I lost so much... Watching 300,000 drop to 180,000, it feels like a loss of 120,000, but actually the principal was only 100,000.

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TokenCreatorOP

· 2025-12-15 06:24

Sigh, that's why I want to smash my phone whenever I see a decline... Even though I know it's just a psychological account trap, I still can't control myself.

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BlockchainDecoder

· 2025-12-15 06:23

According to the theory of mental accounting, this point indeed hits many people's cognitive blind spots. It is worth noting that Kahneman discussed the anchoring effect in his book "Thinking, Fast and Slow"—once a peak becomes a psychological benchmark, any subsequent fluctuations are exaggerated. Data shows that approximately 73% of retail investors use the historical high as the starting point for calculating losses, which leads to systematic decision-making biases.

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