Cutting losses ruthlessly and holding onto profits—these two principles are understood by everyone who has survived in the crypto world.

Recently, a friend came to me with only 800 USDT left in his account. At that time, his eyes were filled with despair. He said this was his last gamble; if he lost, he would have to go home. I looked at his account screenshot and didn’t give any complex technical analysis advice, just three strict rules: divide the 800 into four parts, with a maximum of 200 per trade; make no more than two trades per day, and close the app after completing them; if losses exceed 30%, cut immediately.

No one expected the results that followed. In the first week, he only traded 8 times and made a profit of 200; in the second week, a short position on LSK pushed his account to 5,000; the latest screenshot shows it has grown to 23,000.

This is not a story about getting rich overnight. It’s about a trader who was repeatedly taught by the market and finally learned to respect the rules.

**Why do so many people fall into traps in the digital asset market?**

It’s not because technical analysis isn’t deep enough. The real enemy is those deeply ingrained bad habits in the mind. Behavioral finance has studied this issue: frequent trading, full-position gambling, chasing highs and selling lows, wanting to run after profits, stubbornly holding onto losses—these five traps almost every trader has fallen into.

I’ve seen too many examples. Seeing a coin skyrocket and FOMO chasing in, only to buy at the top; being caught and unwilling to cut losses, watching the account shrink bit by bit; finally making some profit, then hurriedly selling everything, only to miss out on the big trend that follows.

In finance, there’s a term called "disposition effect"—investors are always eager to sell winning positions but hold onto losing ones stubbornly. This psychological distortion is the main reason accounts turn from green to red. The difference between disciplined traders and gamblers lies right here.