How Cognitive Dissonance Makes Traders Hold Losing Positions for Too Long
Cognitive dissonance significantly impacts traders, causing them to hold losing positions driven by emotional conflict and ego preservation. This psychological phenomenon leads to distorted decision-making, misinterpretation of market signals, and avoidance of admitting failures. Professionals combat dissonance through structured decision-making, predefined exit criteria, and emotional awareness, ensuring they maintain capital integrity and discipline.