What does science say?

• A loss is felt ~2 times more heavily than a win (loss aversion) — this is why the trader won't accept a loss.
• In gains people avoid risk, in losses they seek risk — this is where SL-shifting and averaging come from.
• The decision is not rational; it's made emotionally relative to a "reference point."

Base: Experiment — hundreds of survey participants (hypothetical decision problems). Nobel Prize, 2002.

• The more a trader trades, the lower their net income.
• The most active traders lagged significantly behind the market.
• The cause is not knowledge, but excessive trading and commissions.

Base: ~66,000 private accounts, 1991–1996. Most active 20%: ~11.4% net annual return; market: ~17.9%.

• Dopamine fires not at the reward itself, but at the unexpected reward and the signal that promises it (reward prediction error).
• When the expected reward arrives the dopamine response fades — the unexpected one makes it explode.
• The urge for "one more trade" is born from exactly this anticipation signal.

Base: Single-neuron recordings in primates (laboratory neurophysiology).

• High cortisol/stress weakens the prefrontal cortex (the rational center).
• Control passes to the amygdala (fear, reflex) — the "considered decision" is replaced by the "reactive decision."
• This is exactly why "I'll hold myself together with willpower" doesn't work under stress.

Base: A synthesis of dozens of studies (review article) — not a single sample.

• Cortisol levels rise together with market volatility.
• High cortisol makes decisions irrational and risk-averse.
• Not a laboratory — measured on a real trading floor.

Base: 17 male traders, over 8 working days (City of London).

• Activity in the nucleus accumbens (reward center) rises BEFORE a risky decision.
• The desire for risk is born while anticipating a win, before winning anything.
• This is the pure neural mechanism of FOMO and increasing size.

Base: fMRI laboratory experiment (a small group of participants).

• Investors sell the winning position and hold on to the losing one (disposition effect — statistically confirmed).
• They close a win considerably faster than a loss.
• Waiting for it to "come back" is not rational — it's emotional self-defense.

Base: ~10,000 retail brokerage accounts.

• 97% of day traders lost money.
• Only 1.1% earned more than the minimum wage.
• Experience (time) did not help — most were still in loss.

Base: 19,600 day traders, 2013–2015. 97% loss · 1.1% more than the minimum wage.

• Only a very small share of day traders (~1%) makes consistent profit after commissions.
• For most, more trading = steady loss.
• Skill is real, but it's found in very few traders.

Base: Taiwan's entire day-trader population, 15 years (1992–2006).

• Traders prone to strong emotional reactions show the worst results.
• Emotion is both a sign and a cause of poor performance.
• The best don't "manage" emotion; they are less affected by it.

Base: A clinical observational study on day traders (a small group).

• Introduced the term "disposition effect" to the field.
• People close a win too early and hold a loss for far too long.
• The cause is fear of regret and preserving the feeling of "I was right."

Base: A theoretical framework + confirmation with market data.

• Dopamine follows an "inverted-U" pattern: in moderation — beneficial, in excess — harmful.
• Moderate dopamine optimizes the prefrontal cortex.
• Excess dopamine (euphoria) lowers cortical performance — control weakens.

Base: Neurophysiological experiment in primates (laboratory).

• An overconfident trader trades more and loses more.
• Heavy trading is a sign of high confidence, but the cause of poor results.
• Confidence is not knowledge — it often underestimates risk.

Base: ~35,000 private accounts, 1991–1997.

• Psychology and risk management matter more than strategy.
• The steady trader is not the one with the best strategy, but the one who best controls himself.
• Improvement comes through rule-based, repetitive practice.

Base: Many years of clinical practice with traders (no exact percentage cited).