3 Cognitive Traps That Prevent You from Closing Losses!

Hello, friends 😊

Today I want to talk not about indicators or patterns, but about why, even if we know everything "correctly", we still hold unprofitable positions longer than we should. Even when the price doesn't go according to plan and the situation becomes more obvious, we still convince ourselves that " is about to turn around"

Honestly? I sometimes struggle with it myself, but now it's not as panicky as it used to be.

🤔 And yes, I also had moments when I looked at the graph and realized that "that's it, the hypothesis didn't work," but I still thought, "Well, I'll wait a little longer... what if?"

It's not a matter of weak will. The fact is that our brain is designed in such a way that it literally prevents us from making rational decisions at a loss. And today we will analyze 3 such cognitive traps, and see how to work with them.


Let's start, 🚩 Trap #1: The Concorde effect or the error of non-refundable costs (literally "sunk costs") - Costs that have no alternative use: costs incurred as a result of decisions made in the past and which cannot be changed by a subsequent decision in the future. When so much effort and resources have been invested in something that you don't want to stop. But it should be.

For example: "I've already invested so much time/money/nerves - now I have to wait for everything to come back!"

Does it sound logical in principle? But in reality, is an illusion. Because the market absolutely doesn't care how much you have invested. He doesn't have to return anything to you.

🔎 There was a moment when I just joined the market, I held a losing position on ETH for almost a week, because "I've been waiting so long, I'll wait some more." As a result, the loss tripled, and then, when I finally closed, the price went in my direction (classic) 😁
The most annoying thing was not the loss, but the fact that I violated my own rule (ignored the stop)

🔋 How to live with it?
A simple trick: before each trade (or even at the moment of loss) ask yourself : "If I wasn't in a position right now, would I open it under these conditions?"
If the answer is "no", exit. All. Point. Past losses cannot be returned. But you can stop the future ones and return to the market (albeit with a smaller amount)

🚩 Trap #2: The illusion of control is a cognitive distortion in which a person overestimates their ability to influence events that actually depend on chance or external circumstances
For example: "I feel like it's about to unfold. I know this pattern. I have the situation under control."

I feel ... we all use this phrase in our thoughts as a basis, especially when the market is going against us and we cling to hope.

But the truth is that the market is not controlled by anyone. Neither you, nor smart money, nor even those who trade billions. We are all participants in the same probability game.

And when you say, "I feel," what you're really saying is, "I really don't want to admit that I was wrong."

🔋 What can be done about it?
Remind yourself more often: we are not predicting the market - we are betting on probability.
If the price violates your risk level, it is not a "temporary drawdown." This is a refutation of your idea. And respect for the market begins with respect for your plan.

🚩 Trap #3: The Confirmation effect is a cognitive error that manifests itself in a person's tendency to seek, interpret, and remember information that confirms their pre-existing beliefs, and ignore data that contradicts these beliefs

For example: "Look, here's a bullish pattern! The volume is growing! The RSI has bounced back!"*
(and the divergence on the day, the fundamental news and the structure are negative ... but this is "not important", etc.)

Our brain is a master at filtering reality. He automatically searches for everything that confirms our point of view, and ignores everything that contradicts it. This is not stupidity, it is an evolutionary mechanism. But in trading, he's working against us.

🔋What should I do?
Before entering into a transaction, write it down in your diary:
- under what conditions will you leave?
- what signals will mean that you made a mistake?

And when there is already a loss, ask yourself: "What data am I not seeing right now because I don't like it?"

This question is like a cold shower for the ego, but it brings you back to reality.


We're not perfect🔆 I also have days when emotions take over.
But over time, I realized that stability in trading is not about "never making mistakes." It's about making mistakes with respect for yourself and the market and drawing conclusions based on your mistakes.

💡 A loss is not a failure. This is part of the process.
But the inability to control it is what really slows down growth.

📌 So if you closed the loss on time today, even if it hurt, you won.
Because we have saved not only capital, but also the most valuable thing: our trust in ourselves as a trader.

If this post made you nod😉, please rate🚀

And in the comments, write: which of these traps most often "catches" you?
(I still have the illusion of control sometimes. But now I recognize her and gently release her)