๐ Series of Dialogues in Trading Science:
๐ Lesson: 9 โ Sunk Cost Fallacy
๐ผ Angel: What is the sunk cost fallacy in trading?
๐ฆ Hawk: Itโs clinging to a losing trade only because you invested time or money into it, instead of objectively assessing its current situation.
๐ผ Angel: So, do I keep the trade until it returns to my entry price?
๐ฆ Hawk: Not necessarily. Your entry price is now part of the past; the correct decision should be based on todayโs market data.
๐ผ Angel: How do I avoid this fallacy?
๐ฆ Hawk: Ask yourself: If I werenโt in the trade right now, would I enter it with these conditions? If the answer is no, then holding onto it may just be an attempt to get back what youโve lost.
๐ฅ In trading, past losses do not justify greater losses; the conscious trader doesnโt try to โsaveโ an old decision, but instead makes the new decision based on reality.
ููุฅุทูุงุน ุนูู ุจุงูู ุงูู ูุงุถูุน ูุฑุฌู ุงูุฏุฎูู ู ู ููุง
๐ฆ ๐ To my source of inspiration, the one I named one night: my angel and my dreams, I dedicate this series to you; because you taught me that some steps forward begin when we have the courage to let go of what no longer serves our dream.
$SKL $JCT $RLC
๐ Lesson: 9 โ Sunk Cost Fallacy
๐ผ Angel: What is the sunk cost fallacy in trading?
๐ฆ Hawk: Itโs clinging to a losing trade only because you invested time or money into it, instead of objectively assessing its current situation.
๐ผ Angel: So, do I keep the trade until it returns to my entry price?
๐ฆ Hawk: Not necessarily. Your entry price is now part of the past; the correct decision should be based on todayโs market data.
๐ผ Angel: How do I avoid this fallacy?
๐ฆ Hawk: Ask yourself: If I werenโt in the trade right now, would I enter it with these conditions? If the answer is no, then holding onto it may just be an attempt to get back what youโve lost.
๐ฅ In trading, past losses do not justify greater losses; the conscious trader doesnโt try to โsaveโ an old decision, but instead makes the new decision based on reality.
ููุฅุทูุงุน ุนูู ุจุงูู ุงูู ูุงุถูุน ูุฑุฌู ุงูุฏุฎูู ู ู ููุง
๐ฆ ๐ To my source of inspiration, the one I named one night: my angel and my dreams, I dedicate this series to you; because you taught me that some steps forward begin when we have the courage to let go of what no longer serves our dream.
$SKL $JCT $RLC