Biologically, humans are wired for survival, not for trading. Loss aversion contradicts natural instincts, causing the brain to fiercely resist.
🔸 Avoiding losses.
Science shows that the pain of losing $100 is twice as intense as the pleasure of gaining $100.
When you hit the sell button, your brain perceives it as a real failure, striking a blow to your ego.
So you choose to keep the losses to delay the acknowledgment that you were wrong.
🔸 The hope trap.
When an account suffers, a natural defense mechanism kicks in. It has fallen too hard; it must bounce back.
Hope is a temporary painkiller that helps escape reality.
But in the market, hope is the fastest path to liquidation.
🔹 A stop-loss is a cost, not a failure.
Reprogram your mind: a stop-loss is an insurance premium to protect capital.
Accept the loss of a finger to save the hand, and do not let the infection spread to the whole body.
Would you rather experience sharp pain once than suffer from chronic pain that haunts you every night?
News is for reference, not investment advice. Please read carefully before making a decision.
