Loss aversion and the stop that keeps moving
Posted: Fri Oct 30, 2026 6:22 am
The pain of a loss is stronger than the pleasure of an equal gain. That asymmetry is built into human psychology, and it shows up in trading as the urge to avoid closing a losing trade.
Moving a stop a few pips farther away feels like giving the trade room to work. It's actually postponing the loss. Most of the time, the trade ends up at the same stop level or worse, now with a larger loss.
The opposite behaviour happens with winners: closing early to lock in a gain before it vanishes. Together, the two habits produce small wins and big losses, which is the opposite of what a profitable system needs.
A mechanical fix is to place the stop with the entry order, as a bracket, and make moving it away from price impossible without a deliberate extra step. Platforms with server-side stops help.
How many trades in the journal had a stop moved further from price, and what happened to them?
Moving a stop a few pips farther away feels like giving the trade room to work. It's actually postponing the loss. Most of the time, the trade ends up at the same stop level or worse, now with a larger loss.
The opposite behaviour happens with winners: closing early to lock in a gain before it vanishes. Together, the two habits produce small wins and big losses, which is the opposite of what a profitable system needs.
A mechanical fix is to place the stop with the entry order, as a bracket, and make moving it away from price impossible without a deliberate extra step. Platforms with server-side stops help.
How many trades in the journal had a stop moved further from price, and what happened to them?