Why Does Having the Right Exit Strategy Provide Psychological Peace of Mind? #ai #video
1Why Does Having the Right Exit Strategy Provide Psychological Peace of Mind?
Many people adopt the mindset of “holding forever,” and there’s nothing inherently wrong with that. However, it’s important to understand that markets move in cycles, and crypto is highly volatile — anything can happen here. Many market participants adopt a “partial exit” mindset or prefer an exit strategy where they don’t sell all their assets at once, but only a portion. So why is having an exit strategy so important psychologically?
#1 Partial Exit Brings Relief.
When we are 100% exposed in the market, our minds subconsciously develop a one-sided bias — the belief that prices will keep going up. This makes us blind to the possibility that prices can also fall. A partial exit helps open our minds to both the upside and the downside potential of the market.
#2 Never Marry Your Bags in Crypto.
Many people develop deep attachment or even fanaticism toward a certain asset and refuse to take profits. However, the crypto market moves in cycles, and every rise is followed by a correction. Those without a proper exit strategy tend to want to hold forever without selling at all.
#3 No Human Can Endure Extreme Drawdowns.
Humans naturally have loss aversion — the tendency to strongly dislike losing. In a bear market, Bitcoin can drop by more than 70%. Even if future corrections are milder, crypto assets will still remain extremely volatile due to their inherent nature. Ask yourself: are you really prepared for your asset to drop 70%? From 100 million to just around 30 million?
#4 There’s More to Life Than Just Crypto.
There are countless other activities and opportunities outside of crypto. Often, we become fixated on making profits only through crypto, while in fact, there are many other fields that may offer equal or even greater potential. By having the right exit plan, we open the door to new perspectives and life goals beyond the crypto space.