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Psychology

Sunk Cost Fallacy

Continuing to commit to a course of action because of resources already invested, rather than future expected value. In memecoins: holding a dying bag because 'I've already lost so much.' Sunk costs don't predict outcomes — they predict only that you've already paid.

See also
Psychology Anchoring The cognitive tendency to rely too heavily on the first piece of information encountered when making subsequent judgments. In memecoin trading, entry price becomes the anchor, causing traders to hold losing positions waiting to get back to even rather than evaluating the current setup on its merits. → 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. →
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