Let's make 2 questions:
A) you have 100% of chance to lose 30 USD
B) you have 80% of chance to lose 40 USD, and 10% of chance to lose nothing
92% of answers say option B.
A) 100 percent chance of receiving $30 USD
B) 90 percent chance of receiving $40 USD, and a 10 percent
chance of receiving nothing.
80% of answers say option A.
These question were part of a study carried by Daniel Kahneman and Amos Tversky, about market behavior, in 1979.
Successful traders answers: A and B.
Why? Because they play with probabilities. In the long term, for example:
A) loose 30 USD.
B) loose 90% x 40 USD = 36 USD.
A) Win 30 USD.
B) Win 90% x 40 USD = 36 USD.
These answers show how real traders think! They accept their losses earlier, respecting their stop losses, and maximize their profit, keeping their TP.
Trade safely... Remember, a high Drawdown means a high risk!