It’s taking advantage of the “sunk cost” fallacy. People tend to believe that since they’ve already spent $X that they might as well continue. This is why so m

It’s taking advantage of the “sunk cost” fallacy. People tend to believe that since they’ve already spent $X that they might as well continue. This is why so many retail investors will double down on a losing stock position. Any day trader will tell you that this is a complete fallacy. Even if you don’t sell your shares that are losing money, you still have taken the loss, the only one who hasn’t admitted it is yourself. Better to cut the cord and leave instead of trying to dump more money in and “right” an losing situation.