Three major psychological traps:

Three major psychological traps:

1. Greed

Not willing to sell when in profit, always hoping to squeeze out the very last rupee of gain

As a result, unrealized profits are given back to the market, and may even turn into losses

This is like fishing without pulling in the net, thinking you can catch a few more fish, but in the end you catch none and even tear the fishing net apart.

2. Fear

As soon as there is a floating loss, immediately cutting the position

Often, right after selling, the price rebounds

It is like getting on a roller coaster and jumping off before it even climbs the slope; in the end, others enjoy the full ride and the view, while you can only watch from the side.

3. Hopeful luck

Not setting a stop-loss, always hoping the price will recover

As a result, the position gets trapped even deeper

It is like a car about to drive off a cliff, yet still holding tightly onto the steering wheel and refusing to let go.

Greed, fear, and hope are all weaknesses of human nature. To fight them, we must strictly follow two core principles:

1. Stop-loss principle

A stop-loss is not for the market to see; it is a fuse that protects your own capital

1️⃣ Technical stop-loss: Exit when price breaks key support levels, for example: breaking the previous swing low or important moving averages such as MA20 / MA60

2️⃣ Percentage stop-loss: Limit each trade loss to 2%–3% of total account capital. For example, if the account size is 1 lakh, the maximum loss per trade should be 2k–3k

Remember: it must be executed without conditions. Do not adjust the stop-loss level during the trade

Do not “wait a little longer”, the market will not reverse just because you wait.

2. Take-profit principle

Take-profit is not the enemy of greed, but the protector of profits

Set target price: Define targets based on support and resistance levels and swing moves, for example a target return of 8%–15%

Trailing take-profit: When price reaches half of the target move, move the stop-loss up to breakeven to ensure the position cannot turn into a loss

Partial profit booking: When the trend is uncertain, sell part of the position to lock in gains.