The three most common psychological traps in investing:

Long-term investing: when it goes up, you ride the roller coaster; when it drops, you comfort yourself with “sticking to the long term.” After being stuck, you become even more convinced.

Short-term trading: you sell too early and “sell too high” after making a little profit; you cut losses quickly after a small loss. But if you can’t bring yourself to stop the loss, you then announce you’ve decided to switch to long-term investing.

Staying in cash: every day you feel like you missed out on “a hundred million.” The moment you can’t resist and you jump in, you immediately experience the first two.

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