An overview of the 5 most common psychological pitfalls in trading and their counterstrategies. Each one is covered in detail in the following modules.
| Mistake | Core Problem | Immediate Action |
|---|---|---|
| Loss Aversion | Losses hurt 2.5× more than equal-sized gains (Kahneman 1979) | Set stop-loss before entry — never move it further out |
| Confirmation Bias | Only looking for confirming information | Steelman: actively formulate the strongest counter-argument |
| Overconfidence | Increasing risk after a winning streak | Fixed risk rules apply at all times, no exceptions |
| Revenge Trading | Impulsively overtrading after a loss | Define a daily loss limit, then take a 24h break |
| FOMO | Fear of Missing Out — entering running moves | Only trade with a valid setup — never chase the market |