You have been losing money all along, and it might not be because you're not working hard enough, but because you are being tightly held down by one thing—loss aversion.

Human nature has a fatal flaw: the fear of losing is always greater than the expectation of gaining. You might not feel much when you earn a dollar, but losing a dollar can stay with you for a lifetime. Because of this, your life decisions are skewed from the very beginning. You’re afraid to change direction, worried that all the time you’ve invested will be wasted. You’re afraid to stop, fearing admitting you were wrong. You’re afraid to clear your positions, worried that a sale might reverse. You’re afraid to start over, fearing that all those years will become a joke. Do these thoughts sound familiar?

This is not just your problem; it’s an automatic program deep in human nature.

Most people's failures are not due to ability but because they are unwilling to admit defeat. They know deep down that continuing is wrong, but they just can’t swallow that bitter pill. So they choose to tough it out, procrastinate, fantasize about miracles, and ultimately turn a small loss into a huge cost. Think about your worst decisions—aren’t they all stuck on one phrase: “Just a little longer, what if?” But the cold reality is: the market never rewards stubbornness in error.

The most ruthless trait of true experts is never attack, but decisive stop-loss. But this step is the most counterintuitive because a stop-loss means you have to admit your judgment was wrong, that what you invested before is gone, and you have to start over. Ordinary people simply cannot get past this hurdle; they’d rather endure pain than face what has already disappeared.

So you’ll see a particularly cruel phenomenon: the lower the level, the more they like to hold on; the higher the level, the more willing they are to let go. It’s not that they are cold-blooded, but they have long understood a principle—sunk costs are not worth participating in your next decision.