โ๐๐ Why does a trader close a trade before a reversal?
โThis is one of the most painful scenarios.
โThe price is almost at the stop.
โThe trader canโt handle the tension and manually closes the trade.
โโฉ๏ธ After some time, the market reverses and goes back in the original direction.
โFeelings arise:
โข regret,
โข anger,
โข a sense of injustice,
โข the desire to โget whatโs yours back.โ
โโธป
โ๐ฑ Fear biochemistry.
โAt this moment, the body is under the influence of:
โข adrenaline,
โข cortisol,
โข norepinephrine.
โThe brain stops assessing probabilities.
โ๐ฏ Its task is to eliminate the threat.
โFor the nervous system:
โข a floating loss = danger,
โข closing the trade = relief.
โThatโs why the trader closes the position not logically, but biochemically.
โโธป
โโก๏ธ After closing, dopamine relief kicks in.
โWhen the market reverses without the trader, a sharp internal conflict occurs.
โThe brain receives:
โข pain from missed profit,
โข a blow to self-esteem,
โข a sense of loss of control.
โThen revenge-mindedness (revanchism) kicks in.
#Ro_Ma #algoTrading $MUB