Unit 1 · Level 1 · The four demons, up close
Fear: why we sell bottoms
Brain scans show financial losses lighting up the same regions as physical danger. The amygdala fires in milliseconds and screams SELL; the prefrontal cortex (the part that does math) needs seconds you don't feel you have. In March 2020 the S&P 500 fell roughly 34% in five weeks, and many investors sold right at the bottom… just before one of the fastest recoveries ever.
Free to play. No ads, no token, no account needed to start.
What you get asked
Match each player to its role in a panic
Fear will always fire first. That's biology. The plan exists so the fastest voice in your head isn't the one holding the sell button.
In March 2020 the S&P 500 dropped roughly 34% in five weeks. What happened to investors who panic-sold at the low?
The index reclaimed its old high within about five months. Selling didn't remove the loss. It made it permanent.
Selling into a panic doesn't remove the loss; it ___ it.
A drawdown is a number on a screen until fear makes you realize it. That's the moment a temporary decline becomes your permanent result.
A stock fell 50%, from €200 to €100, and fear says sell. If you hold instead, what % gain does it need from €100 to get back to €200?
Down 50% needs +100% to recover. Losses and gains aren't symmetric. That asymmetry is exactly why obeying fear near lows is so expensive.
What actually beats fear in the moment?
Willpower loses to adrenaline; the Trading course's conclusion holds here too. Stops, rebalancing dates, and do-nothing defaults let calm-you overrule scared-you. 🐜
The rest of this unit
FOMO, fear, greed, hope: meet the voices that trade your money for you.