Most traders and investors, even on a professional level, can remember every single big loss they have incurred compared to only a few of their big wins. Here’s an interesting look into the chemical effect of losing money on the brain. The whole article can be viewed from the link below.
From Reuters:
“The experiment showed that a neurotransmitter, or chemical messenger, called norepinephrine, or noradrenaline, is central to the response to losing money. Those with low levels of norepinephrine transporters had higher levels of the chemical in a crucial part of their brain – leading them to be less aroused by and less sensitive to the pain of losing money, the researchers found.
People with higher levels of transporters and therefore lower levels of norepinephrine or noradrenaline have what is known as “loss aversion,” where they have a more pronounced emotional response to losses compared to gains. Loss aversion can vary widely between people, the researchers explained. While most people would only enter a two outcome gamble if it were possible to win more than they could lose, people with impaired decision making show reduced sensitivity to financial loss.”
via Brain study finds what eases pain of financial loss | Reuters.