Loss aversion, explained with the only example traders need
Research consistently shows losses hurt roughly twice as much as equivalent gains feel good. In trading this manifests precisely: you cut winners fast (locking the good feeling) and hold losers long (avoiding the bad one) - the exact inverse of profitable behavior. The countermeasure isn’t feeling less; it’s pre-commitment: hard stops and targets set BEFORE entry, when you’re a strategist, not during, when you’re a defendant. Bias can’t be deleted. It can be outvoted by rules written earlier.
Posted Jul 5, 2026, 12:36 PM UTC
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