Steps
Enter with a limit; only part fills.
You assume full fill and place stops/hedges for full size.
Price moves; your hedge is wrong size.
You scramble: cancel, re-enter, re-hedge.
Market moves during the scramble; slippage increases.
You exit in panic at a poor price.
You blame the market, not the state mismatch.
Next time, you overcompensate with market orders.
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
Plan for partial fills explicitly (25/50/75% rules).
Use smaller clips and build positions over time.
Never place risk controls assuming exposure you do not have.
- 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
Most execution disasters are state-management failures: you did not know what position you actually had.
Related: partial fill, market order.
Field checklist
- Measure spread before entering. If it’s abnormal, you’re trading the wrong product at the wrong time.
- If volatility expands, reduce size first. Don’t “solve” it by widening stops with the same size.
- Avoid the predictable liquidity holes: rollover, session open/close, first minutes after data.
- Assume your stop may fill worse than your entry. Price the worst-case, not the brochure.
- If you cannot explain where liquidity comes from, trade smaller.