Learning centreLesson 07 of 8
Intermediate
9 min readEducationalTrading psychology
Loss aversion, revenge trading and how to design rules that survive emotion.
Loss aversion
Losses feel roughly twice as strong as equivalent gains, which pushes traders to cut winners early and hold losers.
Revenge trading
The urge to make it back immediately is the most reliable way to turn a small loss into a large one.
Pre-commitment
Write the plan before the market opens. Execution then becomes a checklist.
Knowledge check
Answer to reveal the explanation
1. The best defence against emotional trading is…
0 of 1 correct
Key takeaways
- Emotion is data, not instruction.
- Rules must be written in advance.
- Journals expose patterns memory hides.
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