Anchoring to the entry price
Posted: Sat Oct 31, 2026 9:01 pm
Once a trade opens, the entry price becomes a reference point, and decisions begin to revolve around it. A trade at -2 pips is judged as a problem to fix. A trade at +1 pip is a gain to protect. The market does not know the entry price.
That anchoring distorts exits. Moving a stop to breakeven because the entry is a psychological marker, not because the structure supports it. Holding a loser because exiting means admitting the entry was wrong.
A better question to ask mid-trade is: if flat right now, would this setup be taken at the current price? If yes, hold. If not, exit. That one question strips out the anchor.
Writing it on a sticky note near the screen is a surprisingly effective reminder.
The exercise also reveals when an exit is driven by emotion, since the answer to the question and the instinct often disagree.
Does the question work in practice, or does the pull of the entry price win anyway?
That anchoring distorts exits. Moving a stop to breakeven because the entry is a psychological marker, not because the structure supports it. Holding a loser because exiting means admitting the entry was wrong.
A better question to ask mid-trade is: if flat right now, would this setup be taken at the current price? If yes, hold. If not, exit. That one question strips out the anchor.
Writing it on a sticky note near the screen is a surprisingly effective reminder.
The exercise also reveals when an exit is driven by emotion, since the answer to the question and the instinct often disagree.
Does the question work in practice, or does the pull of the entry price win anyway?