There’s a painful phenomenon in the trading world: a lot of people can talk technical analysis as if they’re experts. Their bottom-catching and top-escaping are so precise it feels like they’ve been given cheat codes. In a ranging market, they flip back and forth, harvesting repeatedly—but when the year-end books are tallied, the account hasn’t really grown. Instead, it’s those who look "kinda dumb"—making just one or two moves a year—who end up getting rich beyond measure.
Where is the problem?
It’s not that your eye is bad, and it’s not that your technique is lacking. It’s that when the trend finally starts to reward you, you voluntarily got off the ride.
Every time you review, you slap your thigh: "If only I’d held on to it back then." Then you throw the blame onto the "mindset"—bad attitude, not enough composure, and too shallow of cultivation.
But “mindset” is a universal scapegoat. It becomes a catch-all for all the deeper issues you don’t want to face.
The real answer lies deeper: it’s not losses you can’t withstand—it’s the uncertainty that comes with being “right.”
1. How unrealized gains become “your money”
Let me ask you a question: when your position goes from a 10,000 profit to 50,000, then to 200,000, what are you thinking?
Most people think like this: when they’re up 10,000, they think, “That wait was worth it.” When they’re up 50,000, they think, “I’ve already got 50,000 in the bag.” When they’re up 200,000, their heart skips a beat: “I have 200,000 now.”
Notice this subtle shift: from “I made money” to “I have money.”
The moment you say, “I have 200,000,” your brain quietly makes a dangerous cognitive shift: it starts treating a number the market has temporarily parked in your account as part of your personal wealth.
This is the “endowment effect” in behavioral economics: once you think something is “yours,” the pain of losing it far outweighs the pleasure of gaining it. In trading, this effect is magnified several times over.
So when your position pulls back from a 200,000 profit to 150,000, you don’t feel that you’ve “made 50,000 less”—you feel that you’ve “lost 50,000.” When it pulls back to 100,000, you don’t think, “I’m still up 100,000”; you think, “I’ve already lost half.”
Prospect theory has long shown that losing a given amount of money hurts 2.5 times as much as gaining that same amount feels good.
That’s why the further a trend progresses and the larger your unrealized gains become, the harder it is to hold on. Every pullback feels like someone reaching into your pocket and taking your money—not like normal market movement. Your only instinct is to run and protect what’s left.
You think you’re locking in profits, but really, you’re running away from pain.
2. Why People Prefer a “Certain Loss”
Try another thought experiment: one account is down 100,000, and another is up 100,000. Which one would keep you awake at night?
Almost everyone would say: the one that made 100,000.
This is trading’s most counterintuitive paradox: you’re clearest-headed when you’re losing money, and most confused when you’re making it.
When you’re losing, you know you were wrong, you know where the risk is, and you know whether to cut your losses or ride it out. Of course, a stop-loss hurts, but it’s a definite action—one decisive cut, and it’s over.
What about when you’re making money? You’re on edge: Is this the top? How much higher can it go? Should I sell half now? What if it falls back? Taking profits feels great, of course, but it’s an open-ended question with no right answer—you’ll never know whether you sold at the right time or got out too early.
Why does this happen? Because a loss is a closed loop: the moment you stop out, it’s over. You’ve lost money, but you’ve also let go of all the uncertainty. A profit, on the other hand, is an open-ended event. As long as you haven’t closed your position, the story has no ending.
The human brain is naturally afraid of uncertainty. We’d rather have a certain bad outcome than an uncertain good one. That’s why taking profits feels instinctive—you think it’s rational, but really, your brain is taking the easy way out and avoiding anxiety.
3. Why is “holding on” a hundred times harder than “being right”?
You’ve probably heard this saying: big money comes not from making the right call, but from holding on.
But most people misunderstand this. They think holding means stubbornly refusing to sell, or passively sitting back and doing nothing. It’s nothing like that.
Being right about the market is a one-time decision—you just need to make the right call at a particular moment. It tests your understanding of the market and your technical skills.
Holding on to a market move is an ongoing test. It requires you to make the same decision every day, every hour, for the next few dozen or even a few hundred days: keep holding.
To be right about the market, you only need to understand the market. To hold on, you need to understand yourself.
I’ve seen traders with a win rate of just 40% double their returns in a year—because they only need to get it right once to capture an entire trend, with one winning trade more than making up for all their losses. I’ve also seen “experts” with an 80% win rate make money every day, only to find there was little left at year’s end—because they kept taking small profits, and one loss wiped out the gains from their previous ten wins.
That’s the cruelest part of trading: ten small wins can’t match one big win, while ten small losses can drag an account down.
Holding is so counterintuitive because it forces you to accept one fact: pullbacks within a trend aren’t a risk—they’re part of the deal. No trend moves straight up. Rallies, pullbacks, then more rallies—that’s what a trend actually looks like.
If you can’t stomach a 30% drawdown, don’t expect to make a 300% profit. If you can’t bear to see your account go from being up 200,000 to being up 100,000, you’ll never see the day it reaches 1 million.
Some people say, “I can accept a pullback, but I can’t give back all my profits.” It sounds reasonable, but it’s empty talk. Before a trend truly ends, you can’t tell which pullback is a normal correction and which signals a reversal. If you try to avoid every pullback, you’ll inevitably miss every trend.
4. Change your role: from “owner” to “guardian”
So how do you solve this? Not by training your mindset, chanting slogans, or stubbornly toughing it out. Those are all just surface-level fixes.
The real solution is to redefine your relationship with unrealized gains. You need to go from being the “owner of the profits” to being the “guardian of the trend.”
You need to understand one thing: until you close your position, the money in your account isn’t really yours—it belongs to the market and is only temporarily held in your account. The market can take it away whenever it wants, or give you more whenever it wants. You’re not guarding your money; you’re watching how the trend unfolds.
So what should you do? Four steps:
First, keep unrealized gains separate from your everyday life. Don’t calculate “what I could buy with the profits from this trade,” and don’t think, “Once I make enough, I’ll get a new car or a new house.” The moment you tie unrealized gains to real-life purchases, you start feeling like you own them. The simplest solution: turn off the profit display while you’re trading. Watch the market, not how much you’ve made.
Second, let a trailing stop make the decision for you. Don’t try to guess the top—you can’t, and neither can anyone else. Set a trailing stop: hold while the price stays above it, and exit if the price breaks below it. That line is your agreement with the market: you’re willing to accept any pullback above it in exchange for the possibility that the trend will continue.
Third, willingly give up the last leg of profit. Those who try to sell at the very top usually end up selling halfway up. Mature traders never aim to sell at the very top; they aim to sell after the trend has ended. Giving up the final slice of profit may sound like a loss, but in reality, you’re trading that small sum for the security of riding out the whole trend.
Fourth, check the charts less often. Every time the number in your account changes, your emotions change with it. The more often you look, the easier it is to get thrown off by short-term fluctuations. If you’re trading trends, checking once a day is enough.
5. In the end, trading comes down to your ability to live with uncertainty
Many people think trading is about seeking certainty—finding patterns, building systems, and improving your win rate, all to make outcomes more certain. But in fact, the opposite is true. The essence of trading isn’t eliminating uncertainty; it’s learning to live with it.
Losses are uncertain, profits are uncertain, market movements are uncertain, and the future is even more uncertain. All your analysis, systems, and rules aren’t there to eliminate uncertainty—they’re there to help you find solid footing amid all that uncertainty.
You can’t control the market, but you can control how much you lose on each trade. You can’t predict where the top is, but you can decide how much profit you’re willing to give back. You can’t guarantee you’ll always be right, but you can make sure you only ever trade according to your rules.
Once you truly accept that “uncertainty is the norm,” pullbacks stop being frightening. When pullbacks no longer scare you, you can hold on to the trend. And when you can hold on to the trend, that’s when the big money comes.
Ultimately, trading isn’t about sharpening your eye—it’s about cultivating your character.
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