Steps
Trade moves slightly in your favor.
You move stop to break-even to 'remove risk'.
Normal noise tags the stop.
Price continues in the original direction without you.
You re-enter later, worse price, same thesis.
Repeat: small scratches become a string of costs.
Frustration rises; you increase frequency or size.
The expectancy of the strategy collapses.
Intervention points:
- Cut size at the first sign the chain is forming.
- Pause when you start “fixing” the last loss with a new trade.
- Stop trading when execution quality degrades.
Antidote
If the thesis requires room, give it room.
Only move stops based on thesis updates, not emotion relief.
Use partial take-profit or size reduction if you need psychological relief.
- Stop the sequence: one loss is information, two losses is a warning, three losses is a system failure. Have a hard cut.
- Reduce degrees of freedom: fewer pairs, fewer timeframes, fewer discretionary choices.
- Re-enter only after reset: calm state, checklist passed, size reduced.
Notes
Break-even is not free. It is a structural change: you are turning a trade into a noise-trading system.
Related: expectancy, risk creep.
Field checklist
- If you feel urgency, you’re likely late. Late trades pay the spread twice: once in price, once in behavior.
- After a loss, add a cooldown. Your brain is now biased toward revenge sizing.
- If you’re negotiating rules mid-trade, you’re already off-plan.
- Use a checklist to prevent story-trading.
- Stop when your decision quality drops, not when your account hits zero.