Foundation course in trader judgement
Trading Psychology: Decisions Under Risk
Trading psychology taught from the research on decisions under risk: why traders hold losers and cut winners, how overconfidence grows after a good run, what tilt and revenge trading look like, and the routines that protect you from yourself.
Trading psychology is usually taught as motivation. This course teaches it as evidence. Decades of research on decisions under risk explain why traders cut winners early, hold losers too long, size up after a lucky week and trade to win back a bad morning. Knowing the research does not make you immune, but it lets you build routines that catch the mistake before it costs money.
Why do traders hold losing trades too long?
Because a realised loss hurts more than an open one, and selling makes it real. Researchers call it the disposition effect and have found it in millions of brokerage accounts. The course shows you how to measure it in your own record and the rules that counter it.
How do you stop revenge trading?
Not with willpower. With rules written in advance that end the session after a set loss or a set number of losing trades, and a routine that makes you step away. The course has you design these rules and test them on your simulated trading.
Who is this course for?
Every trader on the trader path, and experienced traders whose results depend on their mood. No programming is needed.
What you will be able to do
- Describe the main biases in trading decisions and the research behind each.
- Identify your own patterns of tilt, revenge trading and overtrading from your record.
- Design a pre-trade and post-trade routine that interrupts the costly ones.
- Recognise the signs that trading has become a gambling problem, and what to do about it.
Syllabus, module by module
Decisions under risk
Prospect theory, loss aversion and the disposition effect: why traders sell winners and hold losers.
Overconfidence
The illusion of control, the hot hand and what a winning streak does to position size.
Tilt and revenge trading
How losses change decisions, and the stop rules that cut the chain.
Stress and fatigue
Sleep, screen time and decision quality, with what desks do about them.
Gambling and trading
Reward, near misses and variable payoffs, and the warning signs of a gambling problem.
Routines that work
Checklists, pre-commitment, cooling-off rules and the weekly review.
How the certificate is earned
Weekly reflection exercises and two graded problem sets: a bias audit of thirty of your simulated trades, and a written personal routine with the evidence for each step. On a pass you receive the Course certificate in Trading Psychology, issued by the Institute with a verification code. Read how certification works.
This course counts toward
- Foundation Certificate in TradingThe first semester of the trader path: a trading course for beginners in eight parts, from how markets and orders work to costs, charts, risk, edge, psychology and the trading journal, with a simulated-account capstone. No previous knowledge and no programming.
- Diploma in Professional TradingThe top credential on the trader path and the Institute's trading certification for people who do not write code. Three semesters, 24 courses and a 160-hour capstone, from a first lesson on how markets work to a six-month simulated trading business reviewed like a desk.
Questions applicants ask
Is trading psychology more important than strategy?
They are not alternatives. A method with no edge cannot be saved by discipline, and a method with an edge can be ruined without it. The course treats psychology as the part of execution that happens in your head.
Does the course include coaching sessions?
No. It is taught through readings, films and exercises, and your work receives written feedback from the faculty.