Loss aversion trading

This is a discussion on Loss aversion trading within the Psychology, Risk & Money Management forums, part of the Methods category; Originally Posted by barjon Yup, that's it. If you don't think trading is about your bottom line then you're living ...

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Old Jun 19, 2017, 11:09am   #9
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Originally Posted by barjon View Post
Yup, that's it. If you don't think trading is about your bottom line then you're living in cloud cuckoo land.
Nothing wrong with that , so true.Our brains are designed to behave this way.

Once we accept this fact , we can move forward for achieving higher targets.

BTW ;On friday I closed a dax trade early for small profit and another this morning , so I am not in cloud cuckoo land.
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Old Jun 19, 2017, 11:22am   #10
 
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Originally Posted by foroom lluzers View Post
Nothing wrong with that , so true.Our brains are designed to behave this way.

Once we accept this fact , we can move forward for achieving higher targets.

BTW ;On friday I closed a dax trade early for small profit and another this morning , so I am not in cloud cuckoo land.
If you have any interest in how I approach my trading then it's all here http://www.trade2win.com/articles/2006-trading-business . Feel free to criticise
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Old Jul 1, 2017, 8:16am   #11
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Thanks! The following members like this post: Lee Shepherd
Old Jul 1, 2017, 2:52pm   #12
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Originally Posted by foroom lluzers View Post
Traders often close positions to avoid a loss ,they take small profits in fear of a larger loss , they put on revenge trades to recover losses , they add to losing positions to average down , they hold on to losing positions , they convert positions into options trades to avoid taking a loss.

Loss aversion traders lose more in trying to avoid losses.

In economics and decision theory, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains: it's better to not lose £5 than to find £5. Some studies have suggested that losses are twice as powerful, psychologically, as gains.

Loss aversion examples
https://www.hitinvestments.com/15-ex...loss-aversion/



No arguments here FL ......all of those things you have discussed are programmed into human behaviour .......doesn't help the trading mindset needed
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Old Jul 14, 2017, 6:24am   #13
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foroom lluzers started this thread many traders fear potential losses during trades , they close early , loss aversion trading technique.Not everybody has the right mindset for trading.

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