Crab Trader's Practical FX Classroom | Lesson 4: Four Psychological Traps Everyone Falls into

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Crab Trader. He achieves 3 million to 10 million yen by trading publicly every day on YouTube Live streams. In 2019 as well, he provides face-presenting live commentary daily from 22:45. The broadcasts are themed to help viewers win and to be a healthy FX channel.

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※This article is a republication/edit of FX攻略.com March 2021 issue. The market information stated in the main text may differ from current market conditions, please be aware.

This Month's Lecture Content

▶ Desire for definite profits and fleeing from losses: Prospect Theory

▶ Sunk cost effect: being bound by costs already spent

▶ Cognitive dissonance: knowing the truth but unable to admit reality

▶ Anchoring effect: being swayed by initial information or judgments

▶ To avoid psychological traps, set and strictly adhere to rules

Prospect Theory Triggers Small Gains and Large Losses

This month, the explanation focuses on the human psychology that has a large impact on trading. In the investment world, methods, lifestyles, and funds vary from person to person. Nevertheless, many people lose assets, and there is no doubt that this is partly due to psychological factors. In other words, it can be said to be a trap that “ordinary people fall into.”

First, let's start with “Prospect Theory.”