In the crypto world, technology is just the stepping stone; the real key to victory lies in the mind. The data is right there, and 90% of account losses are not due to poor strategies but because of psychological barriers—fear, greed, and luck-driven mentalities taking turns, ultimately draining a 5,000 yuan principal within three months. Conversely, those investors who truly turn their fortunes around are all those who have worked on their mental resilience.

Here are the five most common psychological traps in the market, broken down one by one.

The first is paralysis by stop-loss. When losses exceed 10%, 67% of investors do not choose to cut losses and exit; instead, they dig themselves deeper, ending up with an average of 42% being trapped. What should you do at this point? Set a "mechanical stop-loss line," for example, exit unconditionally at -15%, and don’t give yourself the chance to bargain. Historical backtesting data shows that those who stick to timely stop-losses can achieve long-term returns 300% higher than those who stubbornly hold on. This is not just motivational talk; it’s a real difference in hard cash.

The second is fear of profit. When floating gains reach 20%, many panic and rush to sell—80% of retail investors have done this. The result? Missing out on subsequent gains of 300% or even more. Many early investors in ONDO sold prematurely in this way. The solution is to use the "trailing take-profit method," for example, moving the stop-loss line upward by 30% each time the price increases, allowing profits to run freely instead of rushing to cash out.

The third is FOMO chasing highs. When a certain coin suddenly hits the trending list, the probability of buying in jumps to over 70%. The 2024 Boden crash is a perfect example—two weeks before the crash, search volume skyrocketed by 500%, followed by 80% of investors being trapped. To counter this, set a "cooling-off period," delaying any buy decision by 2 hours to give your impulsive self some time to react.

The fourth is revenge trading. After a loss, 50% of investors double down to recover, often resulting in chain liquidations. The defensive plan is straightforward: implement a "three-trades-per-day limit," and if you exceed three trades, lock your account for 24 hours to force yourself to cool down.

The last is confirmation bias. This is the most insidious psychological killer. You will desperately seek information that supports your judgment, ignore risk signals, and only realize the mistake when the last straw breaks the camel’s back.

As the US CPI data is about to be released and market volatility intensifies, these five traps are especially prone to activation. Instead of relying on last-minute efforts, it’s better to build this psychological defense line now.