Clearly, I set a stop-loss, but I always like to place orders in the same direction repeatedly, ultimately getting harvested back and forth by the market.
This is a typical case of "cognitive anchoring + human traps".
Let me break down how to overcome this:
Why does this happen?
Psychological anchoring: Once an order is placed at a certain price point, there is a subconscious belief that "this position should be a key level," leading to a compulsion to bet in the same direction again.
Loss aversion: After setting a stop-loss, the subconscious wants to "get back what was lost," so one continues to trade in the same direction, trying to prove oneself correct.
Confirmation bias: A tendency to seek information that aligns with one’s expectations while ignoring opposing signals.
Ways to overcome it:
1. Remove the anchor: Focus on the trend, not the price
Many people get used to remembering that "4400 was a key point yesterday," and after a breakout, they still think, "it should return to 4400."
Solution: Don’t keep specific numbers in mind, but rather look at ranges + patterns.
For example: Support range 4380-4400, instead of fixating on a single point.
2. Write down the reasons for your stop-loss
A stop-loss isn’t due to the price being wrong, but rather because the logic was flawed.
After each stop-loss, write down:
Why did I enter the market?
Where did I go wrong?
What is the current direction of the market?
This can help you break out of the mindset of needing to prove yourself right.
3. Establish a counter-trading mechanism
If you keep trading in the same direction after a stop-loss, set a strict rule:
If you have two consecutive stop-losses, you must pause trades in that direction and shift to observing or considering a reversal.
This forcibly disconnects the brain from the obsession.
4. Position cooling method
When the anchoring effect is triggered, people tend to act impulsively.
You can set rules:
Once you stop-loss, the position size for the next trade must be halved;
If you make another mistake, halve it again.
This forces you to remain calm and avoids emotional overtrading.
Constantly remind yourself: Trading is not about proving oneself, but about making money.
The essence of the anchoring effect is the desire to "prove oneself right."
To overcome it, one must establish a process of "not proving oneself after a stop-loss":
Logical review → Rule constraints → Position cooling → Direction switching.
