The House Always Wins #1: Loss Aversion

2 March 2015

Scores of retail traders lose money systematically – i.e. strategies replicating exactly their opposite trades, offer guaranteed pay-offs, given a statistically speaking representative time horizon, and sufficient capital to withstand the occasional loss. The question is: how does this come about? The answer is a cornerstone of behavioral economics. To understand the mechanics in detail, please refer to a fantastic […]

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