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Anchoring to entry

Managing a position relative to the price you paid, a number that has no meaning to anyone else in the market.

Your entry is a fact about your history, not about the instrument. Price does not remember it and no other participant is defending it, yet it becomes the axis around which stops get moved, targets get set, and hope gets rationed.

The classic form is waiting to get back to break-even, then closing the instant you do. That behaviour converts a position that is either good or bad into one that is judged entirely by a private number, and it is the mechanism inside the disposition-effect.

A useful drill is to cover the average-price column and ask what you would do with the chart alone. If the answers differ, the entry price is running the trade.

Related: anchoring-bias, reference-point, break-even-effect, disposition-effect

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