The disposition effect is the well-documented tendency to sell winning positions too early and hold losing ones too long. It is driven by loss aversion and the desire to feel right, and it quietly turns a neutral strategy into a losing one. The fix is to let the market, not your feelings, decide exits.
This term belongs to Trading psychology. See how it fits the bigger picture in The Mind, part of the free DEGEN ACADEMY — or watch it play out on the live terminal.
FAQ
What is Disposition effect?
The disposition effect is the well-documented tendency to sell winning positions too early and hold losing ones too long. It is driven by loss aversion and the desire to feel right, and it quietly turns a neutral strategy into a losing one. The fix is to let the market, not your feelings, decide exits.