Money Psychology
The biases that quietly shape financial decisions
Loss aversion
Losing $100 feels roughly twice as painful as gaining $100 feels good. This is why traders hold losing positions too long hoping to "get back to even" — the pain of realizing the loss feels worse than the risk of it growing larger.
Recency bias
After a string of wins, risk feels smaller than it is. After a string of losses, opportunities feel scarier than they are. Both distort decision-making the same way — by overweighting what just happened instead of the actual odds going forward.
Confirmation bias
Once you form an opinion — that a stock will rise, that a strategy works — it's natural to notice information that confirms it and dismiss information that doesn't. Keeping a journal (like the one in this app) that records trades objectively, wins and losses alike, is one of the best defenses against this.
Lifestyle inflation
As income rises, spending tends to rise with it, silently erasing the gains that should have gone to savings or investing. Being deliberate about where a raise or bonus goes — rather than letting spending drift upward automatically — is what actually compounds wealth over a career.