- Loss aversion
I'll admit I'm guilty here, maybe almost all traders are. This is the time when the impact of negative losses is stronger than the positive impact associated with gains. It means that the pain we feel from losing is more intense than the joy of experiencing profit. So this bias has a negative impact on our decision, when a trader experiences losing trades, the fear and discomfort he will feel will cause him to be reluctant, and exit the trade.
It can also happen that you don't put a stop to loss or are in a position to just let it go and risk something like that even though there is evidence that it will happen. And this loss aversion behavior that avoids losing leads to worse losses in the end. Because if you don't cut your losses, you'll just miss out on other opportunities.
This is mostly my problem right now. I dont really put stop losses when I am on the verge of losing streaks because what I think is that it is like a magnet from the price to go there and hit it, which makes me lose more. It is still my fault as I only put stop losses that are really close on my entries and also because they are not that calculated. But again, we are humans, and we can experience those things, and I really do hope that they won't affect us the next time we experience them, as we can learn a valuable lesson from them.
The issue with the stop loss can be easily solved, if your stop loss is too close to the current price and it keeps being hit over and over again then a way to solve this is by reducing the amount of money you use on each one of your trades while you increase your stop loss in the same proportion, this way your stop loss will be wider but the risk that you will take will still be the same and you will not be as vulnerable to a whipsaw.