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
http://ift.tt/2tyOxuu
https://www.youtube.com/watch?v=cr5KZEqBJAk
https://www.youtube.com/watch?v=HVNGJpoSuk8
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
http://ift.tt/2tyOxuu
https://www.youtube.com/watch?v=cr5KZEqBJAk
https://www.youtube.com/watch?v=HVNGJpoSuk8
Loss aversion trading
