The so-called virtue of the "mottainai spirit" turning into something like that is unexpectedly happening...

The sunk cost effect is a phenomenon where the feeling of “wastefulness” makes rational action difficult.

For example, even if a movie is terribly boring,
you think, “I bought the ticket, so I should see it to the end,”
and end up watching it all the way through.

Similarly, feelings such as “I invested so much time…”,
“I’ve worked so hard up to now…”,
“I’ve spent so much money already…”, and other emotions make you
understand that you will incur a loss if you continue as is,
yet it can be difficult to change your behavior.

Sunk cost refers to a “sunk” cost,
a cost that cannot be recovered.
An image might be dropping your wallet into the sea from a boat,
as in a situation where you lose your wallet into the ocean.

Because it involves risk to life, you cannot dive into the sea.
Moreover, even if you dive in, there is no guarantee you will find the wallet.
In the end, you are likely to have to give up.
Rationally speaking, giving up is appropriate.

In FX (foreign exchange trading) as well, the sunk cost concept is important.
For a position with the outlook of “there is no chance of recovery,”
it is wise to give up early and cut losses.

Because of the sunk cost effect,
many traders make the mistake of saying, “I can’t cut losses yet and end up with a bigger loss.”
This is a common mistake.

In addition to stop-losses, the following emotions are dangerous:

“I’ve spent so much time analyzing, so I want some profit even if only a little.”
and “I studied hard, so I want to use that knowledge.”
These feelings can push you to aggressively enter trades in situations where you normally wouldn’t.

In reality, FX is a market that is highly susceptible to sunk cost effects.
If you trade with typical human emotions,
you may feel overwhelmed by constant “wastefulness.”

If you cannot discard sunk costs cleanly,
it is difficult to turn FX profits into positive returns.
As a countermeasure, it is important to think plainly, “What if I didn’t hold this position now?”

For example, if you currently have an unrealized loss on a long position,
you should ask yourself, “Do I want to enter long from here?”
If the answer is “No,”
you should cut that long position immediately.

【Sunk Cost Effect Countermeasures】
Develop a habit of thinking from zero base.