Recently, I saw someone again getting caught in a trade loss, and it’s always the same old problem—clearly making a profit but not daring to take it, regretting when taking profits, and not taking profits then getting reversed back to the original point. This kind of tangled feeling, I think most traders have experienced.

Buffett’s famous quote is indeed a classic: “Be fearful when others are greedy, be greedy when others are fearful.” It sounds simple, but actually executing it is another matter. I’ve found that many people don’t actually lack understanding of this principle, but in real trading, they simply can’t do it.

Think about it, you buy a target, see it profit, and then the market starts to adjust. At this moment, should you take the profit and run or hold on? There’s no absolute answer to this question, but every time it’s enough to drive people crazy. If you exit and the price skyrockets, you’ll regret being too timid; if you don’t exit and it drops back, you’ll blame yourself for being too greedy. Everyone can be a hindsight expert, but when actually in the market, nerves are tight, and rational judgment tends to drift away.

I’ve observed that unsuccessful traders usually have a few typical flaws. Some take profits quickly at the first sign of gains and cut losses early, completely driven by fear. Others trade in the opposite direction, losing and refusing to admit defeat, instead increasing their position countertrend, holding onto luck for a reversal, which often makes things worse. There are also those on the other extreme—chasing rising prices without plan when they go up, and panicking and selling when they go down, blindly following the trend with heavy positions. These approaches might occasionally win a few times, but mostly it’s luck, and eventually the market will teach them a lesson.

The core of Buffett’s “be fearful when others are greedy” is actually about having your own rules. True experts don’t trade based on feelings but rely on systems. They have clear entry and exit logic, strict capital management rules, and most importantly, they can execute them. Cutting losses short and letting profits run sounds simple, but doing so requires overcoming human greed and fear.

Interestingly, human society has evolved over thousands of years—from agricultural civilization to industrial civilization to the information age—everything keeps changing. But human nature itself hasn’t evolved much. However, individuals can evolve. Those professional trading masters, through practical experience and continuous reflection, have managed to conquer their inner weaknesses and ultimately become winners in the market. Most people spend their lives battling their own human nature.

Instead of passively being led by human nature, it’s better to take the initiative. You can use some analytical tools to understand the common mindset of investors in the market, which can actually reduce your risks. When others are fearful, don’t blindly be greedy; when others are greedy, don’t blindly follow. Most importantly, have a plan, respect the market, and continuously refine your trading understanding within what you can control. That’s the way to survive long-term.