Recently, I’ve been pondering an old question, a dilemma many traders encounter. Everyone has heard Buffett’s famous saying—“Be fearful when others are greedy, be greedy when others are fearful.” It sounds very reasonable, but in actual practice, we often don’t know when to be greedy and when to be fearful.

I’ve personally experienced this kind of struggle. Sometimes, when a trade has profits, I’m afraid of a pullback and rush to take profits, only to see the market continue higher, missing out on more gains. Another time, with the same profit, I grit my teeth and refuse to take profits, hoping the trend will continue, but the market reverses, and the profits are wiped out. At that point, I start blaming myself for being greedy.

Many people probably share this feeling. When the market adjusts, you buy at a low point, and after it rises to a profitable level, you hesitate—should you exit or hold? If you exit and the price rises further, you regret being so timid; if you don’t exit and get caught, you blame yourself for being too greedy. It’s easy to be wise after the fact, but when facing the market in real time, most retail and novice traders find it hard to judge rationally because nerves and emotions dominate their decisions.

I’ve found that unsuccessful traders usually display four typical behaviors. The first is taking profits quickly and cutting losses early—this is driven by fear. The second is adding to losing positions, unwilling to admit defeat even when in a loss, hoping for a reversal, which often leads to deeper losses. The third is blindly following the trend—buying when prices go up, selling when they go down—without any plan. The fourth is over-leveraging, putting all their capital into a single position. The last two are driven by greed.

These approaches might occasionally make money, but that’s mostly luck. Truly consistent traders have a system. They have clear rules for entry, exit, and money management, with the core logic of cutting losses quickly and letting profits run, and they strictly follow these rules. Only then can they truly overcome greed and fear.

Interestingly, human society has evolved—from agricultural civilization to the industrial age, and now to the information age—everything changes. But human nature has remained largely the same for thousands of years. However, individuals can evolve. Professional traders improve through practical reflection, gradually overcoming their greed and fear, eventually becoming market winners. Most investors, on the other hand, are forever bound by human weaknesses.

Since human nature is hard to change, we can think in reverse. Use tools to analyze the general state of other investors in the market, understand when the market is overly optimistic or overly pessimistic, and thus reduce our own risks. “Be fearful when others are greedy, be greedy when others are fearful”—but only if you have a reliable system and clear rules.

Ultimately, what investors need to do is respect the market, make rational judgments, and systematically overcome human weaknesses. Continuously improve your trading understanding within a familiar and controllable scope. Only then can you survive longer and do better in the market.