Losing €100 hurts twice as much as gaining €100 feels good

Loss aversion is feeling a loss more strongly than an equal-sized gain. Losing €100 hurts roughly twice as much as gaining €100 feels good, for most people.

This imbalance pushes people to sell what has risen too early, to lock in the good feeling, and hold losers too long, to avoid feeling the loss. Both usually hurt the long-term result.

A coin flip paying +€150 or −€100 is a good bet on average, yet many people refuse it, because the possible loss feels heavier than the larger possible gain.

Deciding when to sell in the moment, driven by how a loss feels right then, usually produces worse results than a rule set in advance, while calm.

Before buying, write down when you'd sell, in both directions. Deciding now, calmly, beats deciding later, while the loss is actually hurting.

Losses hurt about twice as much as equal gains feel good. Decide your sell points before you need them.