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Eight Cognitive Biases That Affect Trading

  
  Education
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8

  1. Loss Aversion – The tendency for people to have a strong preference for avoiding loses over acquiring gains.
  2. Sunk Costs Effect – The tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future. (more…)

Emotional Discipline

  
  Education
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asr1
The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading. I know this will sound like a cliche, but the single most important reason that people lose money in the financial markets is that they don’t cut their losses short.”

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