Many people will ask:
So if I sold at a small loss and the market went up after that, what should I do?
This is a topic we will discuss later… The important thing is that this kind of thinking should not prevent you from executing a stop-loss.
In crypto, we have two very dangerous biases:
First: aversion to loss
It makes you refuse to sell when the currency breaks the stop.
Second: confirmation bias.
This starts after the price drops on you.
You find yourself:
• Looking for positive tweets
• Only listening to analysts who see a rise
• Saying the project is strong and the fundamentals are excellent
• Averaging down and increasing the quantity
Why?
Because your mind does not want to admit that you were wrong.
So you create a false hope for yourself… until you reach despair and sell at the bottom.
The truth is that confirmation bias is a child of loss aversion.
If you accepted the small loss from the beginning and considered it a natural cost in a volatile market like crypto…
You will save yourself from a series of catastrophic decisions.
A small loss is a decision.
A large loss is the result of stubbornness.
The hardest thing in crypto is not the volatility…
But admitting that you were wrong.
And we will explain the psychological biases later, God willing 🙏🏼🙏🏼🙏🏼🙏🏼