Loss Psychology

Filed Under » ,
Dictionary Says

Definition of 'Loss Psychology'

The emotional aspects associated with investing and the negative sentiment associated with recognizing a loss. The fear of financial losses can be overcome, but it requires looking at what has happened logically and learning from it so that you can avoid the same situation in the future.
Investopedia Says

Investopedia explains 'Loss Psychology'

The difference between professional traders and those who are just getting started is their ability to handle the emotions associated with realizing a loss. Holding a losing position can cripple a rookie investor because many decide to hold and hope that the stock will come back to their entry price. The worst case scenario is if the investor sells when the stock has reached a bottom.

Articles Of Interest

  1.

    The Importance Of Trading Psychology And Discipline

    Find out how investing success can be more about your mindset and less about the markets.

  2. 4 Psychological Traps That Are Killing Your Portfolio

    Sometimes your largest financial hurdle is our head. Learn about the common mind-traps that trip up investors.

  3. Understanding Investor Behavior

    Discover how some strange human tendencies can play out in the market, posing the question: are we really rational?

  4. Taking The Sting Out Of Investment Loss

    Get a hold of yourself! Take losses in stride and learn to invest dispassionately.

  5. Weighted Average Cost Of Capital (WACC)

    Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality

  6. Exploring The Current Account In The Balance Of Payments

    Learn how a country's current account balance reflects the country's economic health.

  7. Taking Shots At CAPM

    Find out why many investors think the capital asset pricing model is full of holes.

  8. George Soros: The Philosophy Of An Elite Investor

    George Soros spent decades as one of the world's elite investors, and even he didn't always come out on top. But when he did, it was spectacular.

  9. Understanding And Playing The Dow Jones Industrial Average

    Learn strategies for investing in this price-weighted index and how to interpret its movements.

  10. Introduction To International CAPM

    ICAPM is one of several models used to determine the required return on an asset, discover its limitations and how to use it.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=8a9ddf7f1de9063a63e8bf4e94fc7970