the.com/trading psychology
the market charges tuition in dollars and teaches only one lesson: you are your own worst trade.
means the study of how fear, greed, and ego hijack rational decision-making when real money is on the line.
from emerged as a distinct field once quants proved markets could be efficient yet humans still lost money in them, spawning behavioral finance in the 1970s-80s to explain the gap.
loss aversionlosses feel twice as painful as equal gains
disposition effecttraders sell winners early, hold losers too long
revenge tradinga loss often triggers a bigger, dumber next bet
for instance
jesse livermore — made and lost four fortunes, died broke in 1940
long-term capital management — nobel-winning models, 1998 blowup from overconfidence
gamestop retail traders — 2021 mania fueled by ego and fomo, not fundamentals