Anchoring bias is over-relying on one reference point — often the first number you saw — when making decisions. In trading, that anchor is usually your entry price, a recent high, or a round number, and it distorts every judgment that follows.

Anchored to your entry

The most expensive anchor is your own entry price. "I'll get out at break-even" treats your entry as meaningful — but the market has no memory of what you paid (loss aversion). Waiting to get back to even on a position that has structurally broken down is anchoring holding you in a loser (how to take a loss).

Anchored to old highs and round numbers

"It was $50 last week, so $45 is cheap" ignores that conditions changed — the old high is an anchor, not a valuation. Round numbers ($100, $750) act as psychological anchors too, which is partly why they cluster with real levels (support and resistance). The anchor feels like analysis; it's just a number you got attached to.

The market doesn't know your entry, doesn't owe you break-even, and doesn't care what the price was last week. Only you are anchored — and the anchor is what's sinking you.

Cutting the anchor

Judge a position by where price is now and what the structure says next — not by your entry or a stale high. Let a pre-set stop define "wrong," independent of what you paid (stop-loss orders). A mechanical system has no entry to be anchored to emotionally — it evaluates current conditions and exits on rule, not on getting back to even (mechanical vs discretionary).