I'm fascinated by psychology and how people react to this by receiving the mood and amplifying it themselves.
Let's say you are a person with 10BTC bought at $80k. When we went to 100k you sold some of it, like 20%, so you now have 8 BTC. It went to 124k and now is down to 111k. Logic dictates that you should be happy with 0 pressure to sell because you're nowhere near a loss and the price is above your last sell, and far above your buy, yet in reality you will most likely be unhappy and feel like you should sell more. Why?
-other people are negative
-red candles induce fear of the unknown. What if it goes down more and never stops?
-downtrend makes you feel like the whole investment is somehow flawed and endangered
-you don't know what's up, but maybe others do? Maybe you should follow the group? Do what others are doing?
It's funny, but some of my friends told me that they'd feel better if they sold just a bit, even 10% of their coins and that would make them feel better and safer. According to them, selling a small amount would calm them down.
How do you guys feel during a time like this?
That’s the crazy thing about psychology in trading, even when you’re in profit you can feel pressure like you’re doing something wrong, people tend to forget where they started and only focus on what’s happening right now, so even if you bought at 80k and sold some at 100k you’re already in profit, yet the red candles suddenly make you think you’re in danger. The reality is profit is profit, it doesn’t matter if the chart goes higher later, what you took already is secured and nobody can take that away, looking back only creates regret like “i should have waited” or “i should have sold more,” but those thoughts don’t help, they only mess with your discipline.
Many traders actually sell a small percentage just to ease their mind, like your friends said, it’s more psychological than logical, because securing even a small gain gives that sense of safety, it’s not necessarily a bad move if it keeps you calm and stops you from panic selling later, but the main point is once you’ve taken profit don’t torture yourself by comparing to what could have been, the market always moves, sometimes up sometimes down, if you keep looking back you’ll never be satisfied, the healthy way is to lock in what you’re comfortable with, accept it, and move forward, because at the end of the day secured profit is always better than imagined profit.