$LINK $NEAR $MEME Why do people fight to the death when they lose money, but run away when they make a little money?
Let's first look at an experiment that economists did in a domestic factory more than ten years ago.
The subjects of the experiment were divided into two groups of workers. At the beginning, they told one group of workers that if they could complete the specified production tasks this month, they could get a bonus of 1,000 yuan, while the other group of workers were told that they would have a bonus of 1,000 yuan this week, but if they failed to complete the task, the money would be deducted. The results of multiple experiments were surprisingly consistent. The efficiency of the second group of workers was much better than that of the first group. The explanation given by psychology for this phenomenon is called loss aversion.
1,000 yuan is a gain for the first group of workers, but a loss for the second group of workers. Compared with the same amount of gains, human nature is more disgusted with losses.
Any loss in life will bring pain, and we instinctively resist this pain, so we are unwilling to stop losses, at least hoping to get back our original investment. Besides, the joy of receiving a salary of 1,000 yuan is far less painful than losing 1,000 yuan on the street.
In the process of our actual trading, our emotions after opening a position are anchored on the account principal. Once there is a floating loss, we will instinctively hate it. This emotion will make us hold on to the end, and even increase the position with floating losses in an attempt to recover the principal. When our account has a floating profit, we will instinctively think that the money is already ours. This emotion will prompt us to take the money and run away after making a little profit.
In addition to research in the psychological and medical fields, it also gives a physiological explanation of loss aversion. There is a part of the brain called the amygdala, which is an important structure of emotion and memory. Animals with damaged amygdala on both sides lack the recognition and response to fear events. Once a person may face a loss, the amygdala in the brain will become active, and people with damaged amygdala or naturally insensitive are more likely to succeed in trading.
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