Prospect Theory
The Nobel-winning theory of Kahneman and Tversky describing how people value gains and losses asymmetrically — the foundation of loss aversion.
Related terms
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Confirmation Bias
Confirmation bias is the mind's habit of seeking out information that agrees with what we already believe — and dismissing what doesn't. In trading it keeps people married to losing ideas and blind to the warning signs. Learn how it works, how it traps traders, and how to build the discipline of seeking the opposite view.
Trading Discipline
Discipline is the bridge between knowing what to do and actually doing it — the meta-skill that makes every other edge worth having. Learn what trading discipline really means, why the gap between knowledge and execution is so wide, the role of a written trading plan and rules, and how to build discipline like a muscle.
Emotional Control
Fear and greed are the two master emotions of the markets, and learning to manage them is the capstone of trading psychology. Learn how emotions distort decisions, why a little pressure helps but too much destroys judgement, and the practical routines that keep you calm when real money is on the line.
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