{"id":10649,"date":"2011-04-01T11:29:54","date_gmt":"2011-04-01T15:29:54","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=10649"},"modified":"2023-05-09T07:59:29","modified_gmt":"2023-05-09T11:59:29","slug":"loss-aversion-and-irrational-focus","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus","title":{"rendered":"Loss Aversion and Irrational Focus"},"content":{"rendered":"<p>A passage from <em><a href=\"http:\/\/www.economist.com\/node\/18330455?story_id=18330455&amp;CFID=166970377&amp;CFTOKEN=32148758\">The Economist<\/a> <\/em>that may help our trading- <strong>The referee&#8217;s an anchor: A new book looks at the\u00a0behavioral\u00a0economics of sport<\/strong><\/p>\n<blockquote><p>\u201cLoss aversion\u201d, the tendency for people to care more about avoiding a loss than about making a similar-sized gain, is rife even among the greatest champions. Evidence from a huge database of near-identical putts shows that, along with all the other golfers studied, Tiger Woods is more likely to hole a putt if it is to save par (in golf, an over-par hole feels like a failure) than if he had the identical putt to make a birdie (a gain). The authors argue that this is because he tries harder to avoid the loss than he does to make the gain. That makes no sense\u2014the score versus par on an individual hole is not what matters in golf, but the number of strokes taken over the course of 18 holes. Each putt counts exactly the same, yet players treat them differently.<\/p><\/blockquote>\n<p>If you are down as a trader do you concentrate harder to get back to even but then coast when you are flat? \u00a0Or do you see each trade as One Good Trade and then One Good Trade and then One Good Trade because you never know when that huge chop is coming?<\/p>\n<p>Mike Bellafiore<\/p>\n<p>Author, One Good Trade<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A passage from The Economist that may help our trading- The referee&#8217;s an anchor: A new book looks at the\u00a0behavioral\u00a0economics of sport \u201cLoss aversion\u201d, the tendency for people to care more about avoiding a loss than about making a similar-sized gain, is rife even among the greatest champions. Evidence from a huge database of near-identical putts shows that, along with &#8230; <a href=\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":144,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[162,30,81,1193,653,1354,1349],"class_list":["post-10649","post","type-post","status-publish","format-standard","hentry","category-mike-bellafiore-bellas-blogs","tag-day-trading-blog","tag-prop-trading","tag-smb-training","tag-trader-education","tag-trader-training","tag-trading-coach","tag-trading-mentor","no-post-thumbnail"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.1.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Loss Aversion and Irrational Focus | SMB Training<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Loss Aversion and Irrational Focus | SMB Training\" \/>\n<meta property=\"og:description\" content=\"A passage from The Economist that may help our trading- The referee&#8217;s an anchor: A new book looks at the\u00a0behavioral\u00a0economics of sport \u201cLoss aversion\u201d, the tendency for people to care more about avoiding a loss than about making a similar-sized gain, is rife even among the greatest champions. Evidence from a huge database of near-identical putts shows that, along with ... Read More\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\" \/>\n<meta property=\"og:site_name\" content=\"SMB Training Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/smbcap\/\" \/>\n<meta property=\"article:published_time\" content=\"2011-04-01T15:29:54+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-09T11:59:29+00:00\" \/>\n<meta name=\"author\" content=\"Bella\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:site\" content=\"@smbcapital\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Bella\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\"},\"author\":{\"name\":\"Bella\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#\/schema\/person\/80500a901d0e5ce0a27fa996bb1b9161\"},\"headline\":\"Loss Aversion and Irrational Focus\",\"datePublished\":\"2011-04-01T15:29:54+00:00\",\"dateModified\":\"2023-05-09T11:59:29+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\"},\"wordCount\":230,\"commentCount\":4,\"publisher\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#organization\"},\"keywords\":[\"day trading blog\",\"prop trading\",\"smb training\",\"trader education\",\"trader training\",\"trading coach\",\"trading mentor\"],\"articleSection\":[\"Mike Bellafiore's (Bella's) Blogs\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\",\"url\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\",\"name\":\"Loss Aversion and Irrational Focus | SMB Training\",\"isPartOf\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#website\"},\"datePublished\":\"2011-04-01T15:29:54+00:00\",\"dateModified\":\"2023-05-09T11:59:29+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/loss-aversion-and-irrational-focus#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.smbtraining.com\/blog\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Loss Aversion and Irrational Focus\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#website\",\"url\":\"https:\/\/www.smbtraining.com\/blog\/\",\"name\":\"SMB Training Blog\",\"description\":\"Lessons from the trading desk\",\"publisher\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.smbtraining.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#organization\",\"name\":\"SMB Training\",\"url\":\"https:\/\/www.smbtraining.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2022\/07\/Logo-e1658419502954.png\",\"contentUrl\":\"https:\/\/www.smbtraining.com\/blog\/wp-content\/uploads\/2022\/07\/Logo-e1658419502954.png\",\"width\":230,\"height\":81,\"caption\":\"SMB Training\"},\"image\":{\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/smbcap\/\",\"https:\/\/x.com\/smbcapital\",\"https:\/\/www.youtube.com\/user\/smbcapital\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.smbtraining.com\/blog\/#\/schema\/person\/80500a901d0e5ce0a27fa996bb1b9161\",\"name\":\"Bella\",\"description\":\"Mike Bellafiore is a co-founder of SMB Capital, a day trading firm which takes great pride in its exceptional training program. 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Evidence from a huge database of near-identical putts shows that, along with ... 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