Traders' fear of news stems primarily from deep-seated cognitive biases and emotional responses. Loss aversion makes negative news particularly impactful, as traders feel the pain of potential losses more acutely than the pleasure of gains. This is compounded by the availability heuristic, where recent or dramatic news is given outsized importance in decision-making. The human tendency towards herding behavior also plays a role, as traders fear missing out on important market movements triggered by news.
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