I found that what I fear most is not losing money, but seeing that small floating loss stuck there, and my mind automatically starts to exaggerate: should I add more, cut my losses, or sleep... The unrealized gains are actually easy for me to consider as "what should have been there all along," and then I get itchy to add a little more, only to immediately break my defense when I pull back. Honestly, it's loss aversion that’s too real— the pain of losing 1 dollar is much greater than the joy of earning 1 dollar.

So I set a rule for myself: once I start obsessing over my position to the point that it affects my sleep, it means the size of this trade is wrong. No matter how much research I’ve done, I first reduce the position to a level where I can sleep peacefully. Recently, the fuss over NFT royalties also seems similar—creators fear losing income, buyers and sellers worry about liquidity getting stuck... People are protecting what they might lose, and emotions run faster than reason. Anyway, I treat sleep as my risk control.