Are You Losing Money Trading To This Sneaky Bias? 2

The disposition effect is the tendency for traders to sell out of profitable positions too early and hold on to losing positions for too long.

The disposition effect significantly reduces our ability to trade out of large losses, which is what makes it so insidious – it allows us to dig ourselves into a hole that we later cannot get out of.

How then can we ensure that we do not fall prey to it?

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