#BTC Finally know why I keep losing and running away with a little profit, how to overcome these problems

Traders must have heard the saying 'cut loss, let profit run', but in actual trading, not only did we not follow the saying, but we even did the opposite.
We once conducted a data statistics, investigating what exactly the futures accounts of futures companies experienced from birth to death.
Statistics have found that the vast majority of futures accounts have a survival time between 3-6 months. Further statistics on the trading indicators of these accounts will reveal that most accounts have a very high trading win rate, with some extreme cases reaching a win rate of over 90%. However, they all end up leaving the market with losses.
The reason is that they "lose and hold on, earn a little and run." Once they enter the market, they won't leave until they break even on the losing trades. As soon as they make a little profit, they run away.
This is almost the norm when trading futures. Sometimes we may not even be aware of this, and sometimes even if we are aware, we still can't control or change it.
Those who don't trade futures may not understand this kind of despair. Those who do trade futures eventually attribute it to human weakness. Who said futures are against human nature!
In order to become a successful trader, it is necessary for us to delve deep into what kind of human nature is governing us?
Let's first look at an experiment conducted by The Economist in domestic factories more than ten years ago:
In 2010, The Economist reported an experiment. The experiment took place in a factory and the subjects were divided into two groups of workers.
At the beginning of the week, one group of workers were told that they would receive a bonus of 80 yuan if they could complete the specified production tasks for the week. Another group of workers were told that they had a bonus of 80 yuan for the week, but it would be deducted if they could not complete the tasks.
How do you see, this is a bit like the story of "changing the rules" when feeding dates to monkeys, the results of the two experiments should not have a big difference!
However, the results of multiple experiments are consistent, that is, the second group of workers performs better than the first group.
It's very strange, but psychology provides a good explanation for this phenomenon: it involves a psychological law called loss aversion. For the first group of participants, 80 yuan is a gain, while for the second group of participants, it is a loss. Compared to an equal amount of gain, human nature is more averse to losses.
So the joy of picking up 100 dollars on the roadside is not as much as the sadness of losing 100 dollars.
If this joy and sorrow are quantitatively measured and abstracted as utility, a model of loss aversion in economics can be obtained: in the model diagram, the horizontal axis represents wealth value, and the vertical axis represents utility.

This helps to understand the phenomenon of 'losing and holding, earning and running' very well.
When we open a position, our emotions are anchored to the capital level of the account at the time of opening. Once there is a floating loss, the negative feedback from this kind of loss will make us very uncomfortable, so we choose to hold on and are only willing to exit when we break even. To achieve this goal, we often choose to add to the floating loss position.
And when there is a floating profit after we open a position, we will enthusiastically regard this floating profit as our existing equity, once this equity shows signs of giving back, or even just thinking that it is possible to take back, our brain's "loss aversion" mechanism will open, driving us to quickly take profit and exit the market.
In addition to the psychological aspect, research in the medical field has also provided a physiological explanation for "loss aversion".
There is a part of the brain called the "amygdala", which is an important structure for emotional learning and memory. Animals with damage to the amygdala on both sides show a significant reduction in orientation response to new visual stimuli, and lack recognition and response to fearful events. When a person may face potential losses, the amygdala in the brain becomes active, and individuals with amygdala damage or innate insensitivity may be more likely to achieve trading success.
Struggling with one's own nature all the time is not an easy thing.
How to get rid of these bad habits?
Overcoming the 'Law of Small Numbers':
Don't be swayed by short-term fluctuations, cultivate a long-term perspective. Make a trading plan and minimize interference from market noise.
Alleviate the 'aversion to loss' mentality:
Set the stop loss and take profit points, and strictly execute. Control the risk with position management so that the mindset can be stable.
Adjusting Expectation Management:
Don't always think about making a guaranteed profit and accept the market's uncertainty. Learn to hold on to the trend and don't get off too early.
Recognize Your Irrationality:
Learn behavioral economics to understand your psychological weaknesses. Avoid emotional disturbances through algorithmic trading or external consultation.