Steps
- You hold a position into a known thin window (rollover / session handover).
- Spreads widen and depth thins.
- A small price flick triggers your stop.
- The stop fills with slippage because liquidity is scarce.
- You re-enter out of frustration, paying wide spreads again.
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
- Treat known thin windows as a different regime: reduce size or exit before them.
- Gate trades with spread stability, not chart aesthetics.
- If your strategy requires holding through rollover, your stop model must include slippage.
- 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
Field checklist
- Write the rule in observable terms: if X, then Y.
- Remove choices under stress. Choices become rationalizations.
- Track the precursor: what state were you in before the mistake?
- Make deviations costly (size down, pause, review).
- Turn lessons into gates, not notes.