What You Need to Know About Loss Aversion & Trading 3

Humans are, generally, speaking, more inclined to prefer NOT losing, rather than winning

Another example of loss aversion causing us to act against ourselves is when it prevents us from crystallizing losses when our positions turn against us.

Returning to our hypothetical trader and his position in Apple, loss aversion creeps into his decision making process when he has to decide whether or not to close out his position after it turns against him.

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