How to Maximize Avoidance of Sunk Cost Fallacy and Loss Aversion?

When you invest 10,000 and, by chance, it rises to 30,000, but due to unforeseen circumstances, it drops back to 8,000. You won't feel like you only lost 2,000; instead, you'll focus on having once had 30,000. This illustrates the sunk cost fallacy and loss aversion.

Failing to adjust your mindset and repeatedly dwelling in this state will lead to internal conflicts, causing issues in your current trades.

Here are some specific methods to help avoid the sunk cost fallacy and loss aversion:

1. Set predetermined exit points: Establish clear profit-taking and loss-cutting points before investing.

2. Regularly assess and adjust strategies: Periodically evaluate your investment or decision-making strategies to ensure they still align with your goals and market conditions. This can help prevent decision-making biases caused by overreliance on past experiences.

3. Review the investment process: Document your investment decisions and reasons, which can help you reflect on and understand the decision-making process at that time, reducing feelings of regret.

4. Use a decision matrix: Create a decision matrix that lists all possible choices along with their pros and cons, and evaluate the risks and rewards of each choice based on weight, helping you make more rational decisions.

5. Introduce automation tools: Use investment management tools or trading software to automatically execute profit-taking and loss-cutting strategies, avoiding emotional interference.

6. Practice thought experiments: When faced with decisions, try to view the issue from a third-party perspective, imagining how you would advise someone else in making the decision, which helps reduce the impact of personal emotions.

7. Establish risk management rules: For example, only invest funds that you can afford to lose, avoiding decision-making influenced by large losses.

8. Seek professional advice: Consult experts in relevant fields when making important decisions.#币安Alpha公布第8批项目 #GMT热度飙升 #ATA涨势分析 #币安LaunchpoolBIO预测 #2025有哪些关键叙事？