CoursesTrading Psychology Blueprint: Rewire Your Mind for Success

Loss Aversion – Why You Fear Losses More Than You Love Gains

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What this lesson covers

Winning feels good, and that is not the interesting part. This lesson deals with the other side of it, which is that losing feels considerably worse than winning feels good, and by a wider margin than most traders realise. Loss aversion is the bias behind a large share of the mistakes that cost money: holding a losing position because closing it makes the loss real, taking a small profit early to avoid the discomfort of watching it disappear, and refusing a valid setup after a losing morning. The lesson explains where the bias comes from and how it shows up specifically in trading behaviour, then covers what to do about it, since the feeling does not go away and the aim is to stop it making the decisions.