# Fear, greed, hope and revenge trading > Name the four feelings that move a hand to the button and see how loss aversion turns a 60% win rate into a loss. - Course: [Trading Basics: How It Works, How Not to Lose Everything](https://productovi.com/courses/trading.md) - Module: What if I am the weak link? - Lesson 29/32, ~27 min - Source: https://productovi.com/courses/trading/fear-greed-revenge ## Four feelings at the button **Alex Tutor:** Back on your Pebble practice account, today the chart stays closed. We look at the person pressing the button instead. **Nora:** Then this will be short. I'm not emotional. I just know when to get out. **Alex Tutor:** Let's see. Four feelings show up at the button, and each has a typical move. **Fear**: closing a winner too early, or skipping a trade the plan allows. **Alex Tutor:** **Greed**: going bigger after a few wins, or deleting the target because "it can go higher". **Hope**: holding a loser and moving the stop, because "it'll come back". **Alex Tutor:** **Revenge**: right after a loss, a bigger trade to win it back fast. People call that **revenge trading**. **Marc:** None of these is a character flaw. Everyone feels them. The trouble starts when the feeling decides instead of the plan. **Nora:** Fine, but I'd never do revenge. **Alex Tutor:** We'll see what your log says. Most people spot these feelings in others long before they spot them in themselves. ![Nora hesitates over a big blue button while four little pebble faces float above her: scared, dazzled, hopeful and angry. Alex holds a journal, Marc waits.](https://productovi.com/courses/trading/diagrams/m8-l1-scene.png) > **Exercise:** Match each feeling with its typical move. ## Nora's log **Marc:** Nora, show your last 20 trades. Your plan: 100 at risk to the stop, a target at twice that. **Dataset (CSV):** [Nora's last 20 trades](https://productovi.com/datasets/trading/fear-greed-revenge/m8_hold_log.csv) Plan: risk 100.00 to the stop, target 200.00. Fees 2.00 per round trip; result is after fees. closed_because is Nora's own note. **Nora:** 12 winners out of 20. That's 60%! Better than most, I bet. **Alex Tutor:** A high win rate feels great. Before we celebrate, add up the result column. > **Exercise:** What is the net result of Nora's 20 trades, after fees, in dollars? **Alex Tutor:** Ten of the winners have the same note: "took a quick profit". What did those average? > **Exercise:** In Nora's log, what is the average result of the 10 trades closed with "took a quick profit", after fees, in dollars? Two decimals. **Alex Tutor:** Win often and small, lose rarely and big. Now look at how long each kind was held. > **Exercise:** How many days, on average, did Nora hold her 8 losing trades? Two decimals. ## Loss aversion **Alex Tutor:** This pattern has a name: **loss aversion**. In plain words: a loss hurts more than a gain of the same size pleases. Studies of decisions keep finding it in most people. **Alex Tutor:** So we grab small gains before they can vanish, and we avoid closing losses, because closing makes the loss real. Small wins, big losses: a 60% win rate that loses money. **Alex Tutor:** Quick check on the idea itself before we look at Nora's notes. > **Exercise:** Loss aversion means a loss feels stronger than a gain of the same size, so people tend to close winners early and hold losers. **Nora:** "Moved the stop and waited for it to come back." That's me six times. **Alex Tutor:** And each time it felt reasonable. "It's only a bit lower." "It bounced yesterday." Only the journal puts all six side by side. **Marc:** I had the same habit. What fixed it was a rule I wrote while calm: the stop may move only toward profit, never away from it. **Alex Tutor:** Let's test Marc's rule on one open trade. > **Exercise:** Nora is long from 50.00 with a stop at 48.00. The price is now 53.00. Under the rule "the stop may move only toward profit", which change is allowed? ## The price of hope **Alex Tutor:** Those six losses all went past the planned stop: each loss should have been 102 with fees. Let's price the hoping. > **Exercise:** If each of the 6 "waited for it to come back" trades had been closed at the stop for −102.00, what would the net result of all 20 trades have been, in dollars? **Alex Tutor:** Plus 55 instead of minus 480. And 20 trades still prove nothing about the plan itself, but they show exactly where the feelings cost money. **Nora:** And the quick profits? Should I never take them? **Alex Tutor:** Take them where the plan says: at the target or at a time exit. An early exit is fine if it was written before the trade, not invented by fear during it. **Sofia:** Can you switch the feelings off? **Alex Tutor:** No, and you don't need to. Make the decisions before they arrive: stop and target go in with the order. Name the feeling in the journal. Pause after a loss. > **Exercise:** Which habits take decisions away from the feeling of the moment? Pick all that apply. **Alex Tutor:** Last one. Nora has just sent a message from two open trades. Read it as her coach, not her judge: name what's happening, and say what the plan would have done instead. > **Exercise:** Nora writes: "I sold my winner at +30 because I was scared it would turn. My loser is at −180, but I'm holding, it'll come back." In 2–3 sentences: which feelings are at work, how does loss aversion explain it, and what would the plan have done? > **Key ideas** > > - Four feelings at the button: **fear** (cut winners, skip trades), **greed** (bigger size, no target), **hope** (hold losers, move the stop), **revenge** (bigger trade right after a loss). > - **Loss aversion:** a loss hurts more than an equal gain pleases, so gains get grabbed and losses get held. > - Nora won 60% of 20 trades and still lost 480: average win 72.58, average loss 168.88. Hoping alone cost 535. > - You can't switch feelings off. Decide before they arrive: stop and target with the order, a note in the journal, a pause after a loss. > **Educational, not advice** > > This course explains how trading works; it never tells you what to buy or sell. Most people who trade lose money, and you can lose all of it. For taxes and rules, check with a licensed professional where you live. - Previous lesson: [Case: audit a journal and find the leak](https://productovi.com/courses/trading/audit-a-journal.md) - Next lesson: [A losing streak is normal](https://productovi.com/courses/trading/losing-streaks-are-normal.md) --- Productovi Learning. Free, no sign-up needed to read.