How expert dealers make profits and reduce the risk of loss in a foreign exchange market?

The paper clarified how actual expert dealers made profits and reduced the risk of loss in a virtual foreign exchange market, by comparing the way novice or general investors showed. As a result, we could find that the experts were riskaverse for losses and risk-seeking for profits while the novices showed the opposite behavioral tendency. This result was analyzed in terms of the prospect theory: It was found that the expert could be (partially) free from deposition effect and sunk-cost effect while the novices were not. It was also suggested that the experts’ strategy of dumping losing currencies could be socially transmitted by the dealers’ managers.