Who it's for — Anyone who says «I must break even», «it was at 100 so it's cheap», or moves stops based on cost — not market structure.
Price anchoring is the bias where a reference price — entry, past high, round number — dominates decisions: «I must exit at even», «I won't sell below my price». The market does not know where you entered.
In plain terms — Your entry is not technical support. Anchoring to cost distorts stops, targets, and real risk assessment.
Common forms
| Anchor | Distortion |
|---|---|
| Cost basis | Refusing stop «in loss» |
| Past high | «It was 100, now it's cheap» |
| Break-even | Exit as soon as flat |
| Round number | 50, 100, 10,000 points |
Contrast with objective support and resistance and preset stop-loss rules.
Common mistake — Waiting for break-even on a structurally losing position — the market may never return to your cost.
Example — Long from €52, price €48: refuse stop at €47 «to avoid closing red». Stock falls to €40 — anchoring + loss aversion.
Summary card
- What it is: emotional reference to past price.
- Rule: decisions on structure and plan, not cost.
- Related: Anchoring (jargon).