The syndrome of 'this time it will be different'

Imagine that you are returning home after another day full of emotions in the market. You open your notebook and see a loss of 5,000 PLN because you invested in stocks that 'this time had to bounce back.' A week earlier, you lost 2,000 PLN in the Forex market, betting that the dollar would definitely gain value after the markets opened in Asia. Month after month, with a litany of mistakes, you leave between 10,000 PLN and 20,000 PLN in the market. And all of this because instead of learning from your mistakes, you keep repeating the same pattern. And although you tell yourself that you know better, that this time it will be different, your portfolio tells a completely different story.

Psychologically, the 'this time it will be different' syndrome is the result of the desire to escape from admitting a mistake. Subconsciously, you hope that the market will confirm your beliefs because admitting a mistake hurts. The brain loves confirmations and treats every illusory price bounce as evidence that you are on the right path. As a result, you begin to blindly believe in your visions instead of analyzing the facts. You create excuses and start believing in them instead of trusting the data.

From the experience of many traders, it follows that sticking to your beliefs against the facts is a straightforward path to bankruptcy. Financial markets have no memory, they do not distinguish who deserves to win and who deserves to lose. The thinking 'this time it will be different' assumes that reality will adjust to your expectations. Nothing could be further from the truth. The market operates according to its own rules and has no sentiments. It is logic, not hope, that brings profits.

The principle is simple: 'Do not invest in what has already incurred a loss without additional analysis.' Instead of believing that this time it will be different, rely on cool analysis. Before you reinvest in something that once failed, ask yourself the questions: What has changed? Why should it succeed now? Do I have new data that confirms the rationale for the investment? If you cannot find rational answers, do not take the risk. This way, you will avoid the trap of emotional involvement.

Before every investment, ask the question: 'What has changed?'