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  1. 1 Journal of Management and Financial Sciences

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  1. 1 Ivantchev B.

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  1. 1 2025

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Duration Disparity in Losing versus Winning Forex Trades: Evidence from Individual Traders' Behavior

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Ivantchev B.
Journal of Management and Financial Sciences
|
2025
|
issue 55
77-88
EN
This paper delves into the realm of behavioral finance, drawing upon existing academic literature, research studies, and laboratory experiments to underscore the impact of psychological biases on decision-making processes. However, empirical investigations pertaining to trading behavior, particularly in the context of an escalating number of individual traders, remain scarce. To address this gap, the present study examines a substantial dataset comprising foreign exchange transactions executed by Bulgarian individual traders over a five-year period. Leveraging my prior experience as a capital and forex markets dealer, my objective was to deconstruct my own decision-making and establish a straightforward guideline for mitigating psychological influences on trading behavior. Consequently, this study employs the principles and tools of behavioral finance to scrutinize the extensive trading dataset, aiming to provide empirical support for the composite and intricate effects of loss aversion bias, status quo, endowment effect, and loss attention biases on forex traders' decision-making and their subsequent trading outcomes and returns. Specifically, the research centers on the analysis of time duration disparities between winning and losing trades, elucidating the interrelationship between these ratios and the trading performance of Bulgarian individual forex traders. To the best of the author's knowledge, the investigation into the time duration of winning and losing trades represents a novel addition to existing trading statistical ratios, serving as a means to substantiate and interpret the psychological influences on individual traders' trading outcomes. This pioneering research builds upon two prior behavioral finance studies conducted by the author and an fMRI study exploring distinct patterns of brain activation in response to real and hypothetical monetary outcomes.  
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