Anchoring bias

Anchoring bias - Traders with anchoring bias fixate on an arbitrary price or reference (e.g. purchase price) when evaluating a trade. They may hold a losing position “on hope” it returns to their original entry, ignoring new data. In coding terms, a bot influenced by anchoring might defer to an initial parameter value or historic price level despite changing market context. Anchoring can lead to suboptimal exit decisions (e.g. skipping a planned exit because of an old reference point) and is a well-known cognitive bias in finance.