I believe many traders have experienced this dilemma: when holding a position that has made some profit, they become afraid of giving back those gains and hurriedly take profits, only to see the market continue to surge, watching the profits that rightfully belong to them slip away.

Next time, they learn their lesson, decide to let the profits run, but the market suddenly reverses and gives them a slap, and the hard-earned gains are lost again.

This is the classic paradox that Buffett mentioned—others are fearful, I am greedy; others are greedy, I am fearful. But the problem is, most of us simply can't tell when to be greedy and when to be fearful.

I’ve noticed that many unsuccessful traders share a few common flaws. First is jumping out at the first sign of a loss, taking profits quickly when they see a small gain, and rushing to close positions at the slightest loss. Second is adding to positions against the trend; these people are often driven by fear, afraid to admit losses, and instead hold onto hope, digging themselves deeper. Others blindly follow the crowd—buying when others chase the highs, selling when others panic sell—completely lacking their own trading plan. The last type is heavy position sizing, putting all chips on one side; once their judgment is wrong, it’s a disaster.

The first two behaviors stem from excessive fear, while the latter two are driven by human greed. These people might occasionally make money, but that’s often just luck. In the long run, they will end up suffering significant losses in the market.

I’ve observed some professional traders, and the reason they can survive well in the market is that they have a complete trading system. This system includes clear entry rules, exit rules, and money management rules. They strictly follow these rules, not deviating out of greed in the moment, nor panicking out of fear. What’s the benefit of doing this? It’s the ability to effectively cut losses and let profits run, creating a positive expected return.

Human nature has not evolved over thousands of years—that’s a fact. But individuals can evolve. When you constantly reflect during practical trading and fight against your own human weaknesses, you can gradually overcome inner fears and greed. This is the true meaning of the phrase “others are fearful, I am greedy”—not about greed for greed’s sake, but about having rational judgment and disciplined execution.

The final advice is simple: Respect the market, establish your own trading rules, and continuously improve your trading understanding within controllable limits. Only then can you truly stand out among many losers.