loss aversion

What does loss aversion mean?

There is a term called loss aversion which means that losses have a higher psychological impact than making financial gains. When a person loses $1,000, they feel more pain than the joy of gaining $1,000. In this article we discuss this concept in further and the impact it has on your share portfolio. Definition: In trading psychology, humans feel more pain when they lose money compared to when they win money. Fear is a more dominant emotion than greed. This …

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