Feb 2, 2026 · Josh · 1 min read
The Psychology of the Stop-Loss: Why You Move It (And How to Stop)
Direct answer
Is moving a stop-loss a psychological bias? Yes. Research on loss aversion and the disposition effect shows people hold losers too long to avoid realizing losses. However, a rules-based plan can counteract this by pre-defining exits and enforcing them without negotiation.
Loss aversion and the disposition effect explain the habit. Rules fix it.
Most traders move stops because they are negotiating with pain. The market does not negotiate.
Why you move the stop
Losses trigger loss aversion, which makes you avoid realizing the loss. The result is the disposition effect: holding losers longer than winners.
The hidden cost
Every moved stop changes your plan and increases risk beyond what you accepted at entry. That is how small losses become account damage.
How to stop doing it
Write the stop before entry. Size the trade so the stop is acceptable. If you move a stop, log it and reduce size until discipline returns.
Related reads
References
FAQ
Why do I move stops but not take profits?
Loss aversion makes small losses feel worse than small gains feel good.
Should I use hard stops or mental stops?
Hard stops reduce impulse moves and are safer for most traders.
How do I build stop discipline?
Set the stop before entry and log every violation so the cost is visible.
About the author
Josh
Finance broker, disciplined trader, and lifter. I document practical systems for risk, training, and discipline so readers can build results that compound.
If this helped you, reach out. I read every message and update the playbook when new data shows up.
Sponsored Placement
From the other pillars