Why Haven't You Escaped the Losing Phase?
1. Main Reasons
We often find ourselves losing the profits we have just made in trades. Why does this happen and how can we fix it? Below are some reasons and ways you can take action to build a successful trading method.
2. Irrationality in Trading
Irrational Decisions: In stressful trading situations, we are prone to making irrational decisions. When the market moves contrary to our expectations, many traders tend to jump back into trading immediately to try to recover losses.
Pain from Losing Money: When we lose money, the emotional pain is often stronger than the joy of making a profit. This leads us to be more inclined to "hold onto losses" rather than "hold onto profits."
Pressure from Losing Money: People often feel more disappointed when trades fail, which might be due to trading with money they are afraid to lose or the desperation of not having profits yet. The pain of losing money drives us to seek ways to "make up for it," a flawed perspective since there is no way to compensate for losses.
