Recently, the term “cutting chives” has been frequently heard in the investment world, especially when friends tease you during stock losses. I realized that many people actually understand this concept only on the surface, thinking it’s simply about losing money. But in reality, it’s far more than that.

Chives, as a plant, are resilient; even after they’re cut, they can grow back. This metaphor fits investing better than anything. In the stock market, ordinary investors are like chives—after one wave is harvested, a new wave comes in. This phenomenon is becoming increasingly common in Taiwan’s stock market circles as well, and people have even started jokingly calling it “the chive spirit.”

Why does this happen? To put it plainly, compared with large funds and institutions, ordinary investors are far behind in information, experience, and the scale of capital. We often end up following the crowd into the market—buying what others buy—only to end up chasing the highs and cutting at the lows, losing disastrously. Meanwhile, large funds use their advantages to quietly position themselves at low levels, then raise the price to distribute, and quickly run away, leaving us ordinary investors holding the bag.

The most common “cutting chives” tactics in the market are basically just a few. Pump-and-dump is a classic playbook: first attracting bids, then driving the price up, enticing more people to buy, and finally harvesting at the top. There are also schemes with an element of fraud—scammers pretending to be “authoritative mentors,” showing fake profit screenshots in groups, and once you put in a large amount of money, they disappear. The crypto world is even more ruthless—“air coins,” left hand selling to right hand—every kind of trick seems to come out endlessly.

I’ve found that many investors who end up getting “cut” share several common traits. First, they blindly follow trends without their own judgment. When they see a trending topic, they rush in without doing any research. Second, they lack basic investment knowledge and can’t read the market, so they’re easily fooled by so-called “experts.” Third, they’re greedy and unwilling to accept losses: when they’re making money, they want to make even more; when they’re losing money, they won’t stop the bleeding, and as a result they lose more and more. Fourth, they’re completely led by market sentiment—buying high and selling low, always buying at the peak and selling at the bottom.

So how can you avoid becoming a chive? I’ve put together a few practical, hands-on suggestions.

First of all, you must form your own investment methodology. Before you start trading, study the rules thoroughly and don’t blindly follow the crowd. As Buffett famously said, “Be fearful when others are greedy, and be greedy when others are fearful.” In a bear market, you can be bold about buying; in a bull market, you should be more cautious. Listen more, think more, observe more, and in the end make your own decisions. Over time, you’ll develop your own judgment. At the same time, maintain a strong mindset—control your emotions—and don’t let market swings lead you around.

Second, learn to set take-profit and stop-loss levels. Set your take-profit line and stop-loss line in advance—for example, set a 30% take-profit target, and when you reach it, exit decisively. If losses reach a certain proportion, you also need to be willing to cut the position. Many trading platforms have stop-loss features, and you should make good use of them.

Third, diversify your investments to reduce risk. Don’t put all your funds into a single asset. At the same time, you can consider combining short and long strategies, so you can seize opportunities even when the market is falling.

Fourth, get market information in a timely manner. Look at both technicals and fundamentals, but many people focus only on technical analysis and ignore fundamentals. If you’re even slightly careless and miss a major piece of news, you could go from making money to losing money. Using tools provided by trading platforms—such as financial calendars, real-time news, sentiment indices, and more—helps you grasp first-hand market developments faster.

Finally, be sure to choose legal and compliant large platforms. Don’t listen to some so-called “mentors” of unknown origin recommending you. Those unregulated small platforms are risky beyond imagination. Only when your capital safety is guaranteed does investing actually make sense.

To be honest, it’s hard to completely avoid getting “cut.” But if you do the points above, you can at least reduce the risk by a large margin. Stock investing inherently requires experience to build up and knowledge to be absorbed. If you’ve already been “cut,” the most important thing is to set your mindset right—carefully review that trade afterward, and don’t make the same mistake next time. That’s how you can slowly evolve from a chive into a true investor.