Unit 2 · Level 3 · Handling wins
House money fallacy
A gambler up €500 says "I'm playing with the casino's money now" and bets it recklessly, because losing it wouldn't feel like losing. Traders do the same: profits get treated as free chips, risked in ways the original deposit never would be. But the moment a profit lands in your account, it stops being 'winnings'. It's your money, as real as your salary, as real as your rent.
Free to play. No ads, no token, no account needed to start.
What you get asked
You deposited €5,000 and it's grown to €8,000. What is the €3,000 profit?
Money is money. Would you gamble €3,000 from your salary on a meme coin? If risking the profit feels different, a mental label is doing your risk management.
Treating profits as play-money is called the ___ money fallacy, a classic mental-accounting bug.
Mental accounting means putting euros in imaginary buckets and treating the buckets differently. The euros never got the memo. They all buy the same groceries.
Match the 'house money' thought to the honest translation
Translate the label away and each thought collapses. Your risk rules exist to protect your money, and profits are exactly that.
Why is the house money fallacy so common right after a big win?
Ownership takes time to feel real. Psychologists call the gap 'mental accounting'. The fix is speed: the faster you treat a profit as salary, the faster it gets salary-level respect.
What's the practical antidote to house-money thinking?
One account, one set of rules. The 1% rule doesn't ask where the euro came from. (Withdrawing some profit is healthy too, but that's the next lesson.) 🐜
The rest of this unit
Winning is dangerous too: euphoria, house money, and the discipline of paying yourself.