The Most Expensive Words in Trading: ‘I Can’t Sell Now’”
The Market Doesn’t Owe You Breakeven
Ever held on to a losing trade because it’s now down too much to sell?
That’s the sunk cost fallacy — one of the most expensive mistakes in the market.
Sunk Cost Fallacy
The sunk cost fallacy is the phenomenon whereby a person is reluctant to abandon a strategy or course of action because they have invested heavily in it, even when it is clear that abandonment would be more beneficial.
In the market, it sounds like:
“I can’t sell now, I’m already down 40%.”
“It’ll come back, I’ve been in this trade for months.”
“I’ll average down one more time.”
None of those statements are about the future potential of the trade. They’re all about past pain.
Why It’s So Dangerous
Every trade, position, or strategy should be judged on what lies ahead, not what’s already gone. But human psychology hates realizing losses. So instead, traders reframe: “I’m long-term,” “I believe in the fundamentals,” “It’s oversold.”
Meanwhile, capital gets trapped in a dead position and opportunity cost compounds. The sunk cost fallacy doesn’t just lose you money — it keeps you from deploying money where it could grow.
Classic Market Examples
Tech stocks after the 2000 bubble: Investors who bought at the highs held for years, waiting for breakeven, while the next bull market happened elsewhere.
Meme Coin Bag Holders
Averaging down in losing trades
The CI Volatility View
At CI Volatility, we treat every position as if we just opened it today. Would we still buy it now?
If the answer is “no,” then holding it doesn’t make sense. We design our systems to eliminate sunk-cost bias entirely. We love unemotional exits that free up capital for the next opportunity.