Loss aversion
Risk & psychologyThe finding that losses are felt roughly twice as intensely as equivalent gains.
In plain terms
Why "I will sell when it returns to my buy price" is such a costly sentence.
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Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Stress response
Risk & psychologyThe physiological reaction to acute stress, which narrows attention, strengthens loss aversion and shortens the felt time horizon.
In plain terms
The horizon that was ten years becomes ten days. It is why stopping for the day after a significant loss is protection rather than punishment.