The results of the tests I published yesterday. Part 1.
Remind you of the options:
A. 80% will receive 4000 and 20% will receive nothing
B. 100% will receive 3000
A. 80% will lose 4000 and 20% will not lose anything
B. 100% will lose 3000
This is one of a series of experiments by behavioral economics founders Daniel Kahneman and Amos Tversky, for which they received the Nobel Prize (Tversky did not receive it due to his death).
According to the results of the experiment, in the first question, option B was chosen by 80% of respondents, meaning people preferred guaranteed income. This showed that when it comes to earning, people avoid risk.
In the second question, option A was chosen by 92% of respondents. Despite the fact that there was a high chance of losing more, people chose risk.
Think of yourself: you see +100% on the deal, you can't resist and close it. However, when you see -100%, you start to take risks and hold the deal longer, hoping to avoid losses.
Congratulations. Now you know the reason why you will never make money trading 🙃
If you also chose the options B-A (most did), it means you do not understand what mathematical expectation of win/loss is.
Continuation in the next post ☝️
