Loss Aversion Test — Free 10-Question Investing Psychology Check

See how much more heavily you weigh a loss than a gain of the same size. Ten questions in about three minutes on habits like delaying a stop-loss, over-holding safe assets and fixating on break-even, scored 0-30 with four bands. Items written by Soundary; not investment advice.

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What's included

Questions: 10 items
Price: Free
Areas measured: Loss Aversion Tendency

When this scale is worth taking

If you have spent months unable to close a losing position because selling would make the loss real, if you back away from an opportunity with a good expected return the moment there is any chance of losing principal, or if you keep far more than you need locked in deposits, this scale can help you understand yourself. Loss aversion is the tendency to feel a loss much more strongly than a gain of the same size, and most people have it to some degree.

The ten items ask about delaying stop-losses, leaning heavily on safe assets, fixating on break-even, anxiety in the face of possible loss and the habit of picturing losses before gains. Soundary wrote the items around the concept of loss aversion described by prospect theory; they are not a translation of any standardized scale. A high score is not a problem in itself; it is a neutral disposition. But the stronger it is, the more likely it is to feed specific trading biases, so simply knowing where you stand is useful.

What to do with your result

The total runs from 0 to 30. A score of 0-7 means you weigh losses and gains fairly evenly; 8-15 is the average band, mostly balanced but with occasional avoidant choices when a large loss looms. A score of 16-22 is somewhat high, where you may delay stop-losses or lean toward safe assets, and setting rules in advance, such as a stop-loss level and position size, helps. A score of 23-30 is high, where fear of loss can dominate decisions; revisiting your investment principles or talking with a financial or psychological professional is an option. These bands are Soundary's reference thresholds.

Dispositions change slowly, so retake it every six to twelve months, or after a major loss or a sharp downturn. Whatever your score, writing down the potential gain and the potential loss side by side before a decision, and fixing a loss limit in percentage rather than money terms in advance, reduces emotion-driven choices. Use the investment risk tolerance check to see how much risk you are willing to take, and the investor bias check for a wider view that includes overconfidence, herding and the disposition effect. If you keep avoiding your account or lose sleep over losses, ask whether the amount invested exceeds what you can psychologically bear. This result is for reference only and is not investment advice; any investment decision and its outcome remain your own responsibility.

How scores are interpreted

Loss Aversion Tendency

This is your total score for loss aversion tendency. The higher the score, the more intensely you feel losses compared to equally sized gains, increasing the likelihood of trading biases such as avoiding stop-losses, overallocating to safe assets, and obsessing over breaking even. This is not an abnormality but an investment tendency; being aware of it helps you make more balanced decisions.

0–7pts · Low / Balanced
You tend to perceive losses and gains in a relatively balanced way. You are not heavily swayed by the fear of loss, allowing you to execute necessary stop-losses or take reasonable risks with relative composure.
8–15pts · Moderate
You generally maintain a balance, but you may occasionally make evasive choices in the face of large losses. Writing down and comparing the potential gains and losses before making a decision can help you judge more calmly.
16–22pts · Somewhat High
Your desire to avoid losses is somewhat strong. You may delay cutting losses or lean too heavily toward safe assets. Setting principles in advance, such as stop-loss limits and investment proportions, will help reduce bias.
23–30pts · High
The fear of loss heavily influences your judgment, which can lead to irrational trading biases. This is merely a personality trait and not a fault. If necessary, it may be helpful to re-evaluate your investment principles or consult with a financial or psychological professional. Take the test again after some time to observe any changes.

Sample questions

1. The pain of a loss feels much greater than the joy of an equally sized gain.
2. I rarely sell losing investments because selling feels like locking in the loss.
3. I hesitate to invest if there is even a slight chance of losing my principal, even if the expected return is high.
4. Even when I need to cut my losses, I keep delaying the decision, thinking "it will go back up."

Reflecting on your recent attitudes toward investment and money, please answer honestly how closely each statement describes you. There are no right, wrong, good, or bad answers.

FAQ

From what score is loss aversion considered high?

On the 0-30 total, 0-7 is low and balanced, 8-15 average, 16-22 somewhat high and 23-30 high. From 16 upward you may tend to delay stop-losses or lean too far toward safe assets, so setting rules in advance, such as a stop-loss level and position size, helps. These bands are Soundary's reference thresholds, and a high score is not a fault.

Is strong loss aversion a disadvantage in investing?

It cuts both ways. Strong loss aversion can make you delay a needed stop-loss or avoid opportunities too readily, but it also protects you from big mistakes and reckless leverage. Conversely, feeling little about losses does not mean your risk is well managed. What matters is knowing your disposition and building rules that fit it. This result is for reference only and is not investment advice.

How can I fix my habit of not cutting losses?

The most effective step is to write down your exit conditions, a target and a loss limit, at the moment you buy. Set the limit as a percentage rather than an amount, and shift your yardstick from "my purchase price" to "would I buy this asset today at this price?" Writing the potential gain and loss side by side before each decision also reduces emotional interference. This is general guidance, not individual investment advice.

How often should I retake it?

Dispositions change slowly, so every six to twelve months is a comfortable rhythm. Retaking it right after a major loss or a sharp downturn may give a different score from usual, and that difference shows how your judgment shifts under stress. Save your results and view them alongside the investment risk tolerance check and the investor bias check to see the whole picture of your investing psychology.

Source

The items in this test are a self-check adaptation based on the original instrument and literature below: Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. / Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model. Quarterly Journal of Economics, 106(4), 1039–1061. — A reference-only self-check whose items Soundary wrote with reference to the original literature on loss aversion. It is not a translation or adaptation of any standardized scale; the score bands are Soundary's own reference thresholds, and the result is not investment advice.

This is a self-screening tool, not a medical diagnosis. If the result concerns you, please consult a mental health professional.