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Inside the Trader's Mind: Evidence on the Perception–Behavior Gap in Individual Trading

Year: 2026

Type: preprint

Abstract: Do active private traders act on emotion more than they recognize? In order to understand more about this issue, we try to understand more about loss-recovery impulses among online traders. In our online survey among traders, we found that plan-incongruent and affect-consistent behaviors were common. Roughly four-fifths of the 103 respondents reported taking a “loss-recovery” trade to win back a prior loss, and similar shares reported trading against prior analysis, acting on emotion, or being influenced by peers. However, respondents nevertheless considered themselves rather rational, and a large majority believed that other traders are emotion-driven. We term this divergence between self-conception and reported behavior as the emotion–control gap. The pattern aligns with Prospect Theory, dual-process accounts of hot-state overrides, and social-influence mechanisms, and suggests practical avenues for trader education and platform design.

Source: Zenodo (CERN European Organization for Nuclear Research)

DOI: 10.5281/zenodo.21027742

Authors: Amelang, Marcelas Enrico, Hieke, Hubert

Institutions: Schiller International University, Schiller International University, Schiller International University, Schiller International University, Schiller International University

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W7166532956

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