Trading psychology is how feelings about a trade change the decisions you make in it. The chart says one thing, and the price you paid, the morning you had or the run you missed decides another.
Across 10,000 brokerage accounts, investors sold 14.8% of their gains and 9.8% of their losses on the days they sold anything. The winners they sold went on to beat the losers they kept by 3.4 percentage points (Terrance Odean, 1998).
The lessons here cover three of those moments.
| Moment | What the feeling says | What it can cost |
|---|---|---|
| Holding a losing trade | Selling makes the loss real | A small loss grows |
| Revenge trading | A bigger trade wins the morning back | One more loss, at a bigger size |
| FOMO | Buy now, before it goes higher | A late entry that risks more to make less |
Each lesson puts you in one of these moments on a generated chart or a run of trades. You decide before you know the outcome, the way a live trade asks you to, and the lesson explains afterward.
What does the research say about trading psychology?
All three moments have been measured in real traders' records.
| Study | Who | Finding |
|---|---|---|
| Odean, Journal of Finance (1998) | 10,000 discount brokerage accounts, 1987 to 1993 | Gains were sold at 14.8%, losses at 9.8% |
| Coval and Shumway, Journal of Finance (2005) | Proprietary traders at the Chicago Board of Trade | They took above-average afternoon risk to recover morning losses |
| Barber and Odean, Review of Financial Studies (2008) | Individual and institutional investors | Individuals were net buyers of stocks in the news and stocks with extreme one-day returns |
How do you handle the feeling during a trade?
Set a rule before the session, and ask one question when the moment comes:
| Moment | The question to ask | A rule set in advance |
|---|---|---|
| Holding a losing trade | Would I buy here with no trade open? | A stop loss set before entry, never moved further away |
| Revenge trading | Would this setup get this size on a fresh morning? | The same percentage every trade, and a daily loss limit |
| FOMO | Would I buy the last few candles on their own? | A list of setups written before the session |
The lessons show each question at work. In the first one, the same chart and the same candle come back with the entry line removed, and you see whether your answer changes.
What do the three lessons cover?
| Lesson | What you do | What you learn |
|---|---|---|
| Why traders hold losing trades too long | Hold one trade through five sell-or-hold decisions | The disposition effect, and the question that separates the chart from the feeling |
| Revenge trading | Pick your risk on five trades of a bad morning | What losses do to your next size, and the rules that stop it |
| FOMO in trading | Watch a 42% run and say when you would buy | Why a big run pulls you in, and what a late entry costs |
Each lesson takes a few minutes and needs no sign-up. The charts are generated, with no ticker and no dates.
The risk management lessons cover the numbers these feelings push against. A strategy that wins 6 trades in 10 still loses 6 or more in a row in about 1 run of 100 trades in 5.
Start with lesson 1 and hold your first trade.