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Psychology

Disposition Effect

The documented investor behavior of selling winners too early and holding losers too long. Named by Shefrin and Statman (1985), confirmed empirically by Odean (1998). The financial-markets fingerprint of loss aversion. Structurally incompatible with memecoin trading, which rewards letting rare winners run.

See also
Psychology Loss Aversion The empirical finding that losses feel approximately twice as painful as equivalent gains feel pleasurable (Kahneman and Tversky, 1979). The engine behind the disposition effect. Structurally incompatible with memecoin trading, which requires cutting many losers fast to afford the rare large winner. → Psychology Reactor (Archetype) The trader archetype anchored to feelings and PnL. Identity collapses with the bag — a green day means 'I am a good trader,' a red day means 'I am a bad trader.' Time horizon compresses to the next five minutes. Re-learns the same lesson on a six-week loop indefinitely because there is no record. → Psychology Plan-Followed vs Plan-Broken The journaling distinction between trades where the pre-committed plan was executed and trades where it was deviated from. Expectancy must be calculated separately for each. If plan-broken expectancy matches or beats plan-followed, the written plan is not a plan — it is a written suggestion. →
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