Disposition Effect

Behavioral Discipline

Selling winners too early and holding losers too long. A well-documented trading behavior where investors sell assets that have increased in value while keeping assets that have dropped. Driven by loss aversion and the desire to avoid regret. Example: Your stock is up 15% - you sell to 'lock in gains.' Another stock is down 20% - you hold because 'it will come back.' Research shows this pattern destroys returns more than any single mistake.