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Atlas of Cognitive Biases #37 · Gains, losses and risk. This morning's profit isn't “someone else's money”
What it looks like in trading
bigger risk after a profitable morning
“I'm playing with my profits”
giving back a good day in the last hour
An example from a session
By late morning the trader is at +3R. In the afternoon they increase their size, because “it's today's profit anyway”. They finish the day at +0.5R and write “bad luck” in the journal.
Hetman Capital Club
What you get in Hetman Capital Club
the full Atlas: 65 biases, each with a shield and a journal exercise tests of the biases on real Dow Jones data (the “Biases by the numbers” series) the trading journal and the trader's mental workshop the US session live, where you can see these biases in practice See what's inside the Club
What the research says
Thaler and Johnson (1990) showed that after a prior win, participants were more willing to accept risky bets. The winnings were treated as a separate account that's easier to lose (mental accounting).
Related biases
🔒 In the full version in the Club
The shield – how to defend yourself : concrete rules to write into your trading plan. An exercise for the week : how to catch this bias in your journal. Plus tests on real Dow Jones data and bias-recognition training. (The Club is in Polish.)
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Frequently asked questions
What is the house money effect? After a gain we take more risk, because we treat winnings as “not really ours” and easier to lose.
How does the house money effect show up in trading? Typical signs: bigger risk after a profitable morning; “I'm playing with my profits”; giving back a good day in the last hour.
Educational content, not psychological advice or an investment recommendation.
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A real market. I trade futures contracts on the regulated CME exchange in Chicago, with one central order book. Not CFDs, and not forex with a MetaTrader broker that sets its own prices.Professional tools. Order flow, footprint charts, the order book (DOM), volume profile and delta in Sierra Chart – the tools professional futures traders use.Paid, real exchange data. I pay for data straight from the exchange, trade by trade. Every number, chart and statistic I show comes from actual trading, not from one broker's tick volume.Hetman Capital Club
Now you know this bias. See how to catch it live. In Hetman Capital Club each of the 65 biases has a shield for your trading plan and a journal exercise, and in the live session I show when they really appear: after a loss, after a winning streak and before macro data. The Club is in Polish.
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