Your Brain Hates Losses

Psychologists Daniel Kahneman and Amos Tversky showed that humans feel the pain of losing $100 roughly twice as intensely as the pleasure of gaining $100. This asymmetry is called loss aversion, and it's the engine behind nearly every panic sell-off.

When your portfolio drops 10%, your amygdala — the brain's threat detector — fires the same alarm it uses for physical danger. Rational analysis shuts down. You stop calculating and start surviving. That's why smart people make terrible decisions on red days.