I've been thinking about an old question in the investment world recently.

Everyone has heard Warren Buffett's famous quote — "Be fearful when others are greedy, be greedy when others are fearful." It sounds very reasonable, but when it comes to actual trading, most people get stuck.

I've seen too many scenarios like this. Someone holds a profitable position, afraid of giving it back, quickly taking profits and cashing out, only for the market to continue rising significantly afterward, leaving them to regret it later. Others insist on holding, hoping to let profits run further, but when the market reverses, profits are wiped out, and they start blaming their greed. This kind of wavering actually reflects the same core issue — we simply can't tell when to be fearful and when to be greedy.

This dilemma is most common in stock, futures, and forex markets. When prices rise from lows to profitable levels and the market begins to correct, should we exit? Opinions vary widely. If we exit and prices go higher, we regret being too conservative; if we stay and prices fall further, we regret being too greedy. Everyone can be a hindsight expert, but in real trading, very few can get it right.

What is the root cause? Mindset. People in the market are often in a tense state, making it hard to make rational decisions. Either overly greedy or overly fearful, ultimately wasting their investment.

I've observed that unsuccessful traders typically exhibit four typical behaviors: panic and sell at the first sign of loss; add to positions against the trend; blindly chase rising prices or cut losses on falling prices; or heavily concentrate their positions. The first two stem from fear — fearing to give back gains or unwilling to admit losses, they hold onto hope and add positions, ending up with bigger losses. The latter two stem from greed — chasing after rises or cutting losses on dips, often without a plan, leading to big losses in the end.

How to break this cycle? A complete trading system is needed. Not necessarily complicated, but with clear rules — when to enter, when to exit, how to manage funds. The core logic is to cut losses early and let profits run. Once you have these rules and follow them strictly, you can greatly overcome greed and fear.

Interestingly, human nature hasn't evolved much over thousands of years. But individuals can evolve. Professional traders succeed by continuously practicing and reflecting, overcoming the fears and greed within human nature, ultimately becoming market winners. Most people can't do this because it requires ongoing self-confrontation.

Another perspective is to think contrarily. Since human nature is hard to change, we can use tools to analyze the general sentiment of market investors and understand the true meaning of "be fearful when others are greedy, be greedy when others are fearful" — not blindly doing the opposite, but remaining clear-headed when market sentiment is extreme.

In summary, respect the market, think rationally, and continuously improve your trading understanding within a familiar and controllable scope. That is the way to survive long-term in the market.