Steps
1) You keep adding filters to avoid losses.
2) Trades become infrequent; boredom and FOMO build.
3) When a signal finally appears, you size up because it “meets all conditions.”
4) The market shifts regime; your filtered pattern fails anyway.
5) The oversized loss erases months and forces emotional decisions.
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
• Separate edge from comfort. Filters that reduce sample size often increase fragility.
• Fix size first: risk per trade should not depend on how “rare” the signal feels.
• Run a minimum sample rule: if you can’t get X trades per month, you’re probably optimizing noise.
- 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.