The emotions that wreck your trading
Day 23 of 26 · 12 min read · By DT Terminal
Fear, greed, revenge, FOMO, overconfidence and boredom all leave a trail in your record: the wrong size, the wrong time, the entry far from your level, the winner closed early. This lesson shows what each one looks like on the chart and in your trades, what usually sets it off, and one counter-rule for each.
Unlock the full lesson in the app
Worked examples, the quiz and the interactive tools are in the app. Free account.
Emotions leave a trail in your record
Every trader feels fear, greed and frustration. Feeling them is not the problem. The damage comes from the decisions you make while you feel them: the order to win a loss back, the stop moved, the winner closed too soon.
Those decisions leave a trail: odd sizes, odd times, entries far from your levels, exits your plan never named. A trail can be counted and fixed. A vague feeling cannot.
Emotions also chain, each one setting off the next. Here is one week.
How the chain runs, and how this lesson works
A run of wins makes you overconfident, overconfidence makes you size up, the big loss that follows makes you want revenge, revenge makes the loss bigger, and then fear stops you taking the next good setup.
This lesson takes the six emotions in that chain one at a time. For each one: what it looks like on the chart and in your record, what usually sets it off, and one counter-rule. It builds on the if-then rules from the Discipline lesson: a counter-rule is an if-then rule aimed at one emotion. The goal is not to become calm.
Fear: hesitating and closing early
Fear shows up as hesitation, skipping a setup that is there, or closing early, taking profit before the target because price paused. Both feel like caution. Both cost money.
Fear
- Counter-rule
- Risk an amount you can lose without flinching, and close a trade only at the stop, the target or a point the plan names.
Worked example
Example 01: What closing early does to the same strategy
The worked example, with every number walked through, is in the app.
Go deeper
Fear
- On the chart
- A valid setup at your level with no order on it, or a winner closed by hand long before the target.
- In the record
- Missed setups that would have won, average wins far smaller than the targets you planned, lots of trades closed by hand in profit.
- The trigger
- A recent loss or losing run, or a position size that is too big for you to sit with.
Closing early does turn some losers into small winners, so be generous and lift the win rate to 55%. It is still −0.01R. The expectancy math from Day 9 is unforgiving here: small wins and full losses lose.
Closing winners early is common enough to have a name: researchers call the habit of selling winners too soon and holding losers too long the disposition effect, and found it in thousands of real brokerage accounts.
A common root cause is size. If a loss at your normal size makes your stomach turn, you are trading too big for you, and no rule will hold. Go back to Day 4 and pick a risk you can lose ten times in a row without flinching. Watching dollars move during a trade feeds the same fear, which is why many traders show results in R, or hide them, while a trade is open.
Greed: oversizing and moving the target
Greed is fear's mirror: wanting more than the trade was built for. A bigger position because this one feels like the one, or a target dragged away as price gets close.
Greed
- The trigger
- A trade going well, a big move on the screen, or wanting the whole week made in one trade.
- Counter-rule
- Size comes from the risk rule before the order, and the target moves only by a rule written in the plan.
Oversizing is the expensive one. Risking 3% instead of 1% triples what a normal losing run costs.
Go deeper
Greed
- On the chart
- A target dragged further away as price gets close, or a position several times your usual size.
- In the record
- Size that jumps on some trades, and trades that were up 1.5R or more and closed at breakeven or a loss.
The trades you feel best about are not reliably more likely to win. Change how you manage winners in the plan, and test it. Never on one trade, in the moment.
A target dragged away as price gets close turns a planned win into a breakeven or a loss. The size of every trade should come from the same rule, set before the order, so a feeling can never reach the lot size. If you want to change how you manage winners, change the rule in your plan, test it in the backtester, and apply it to every trade.
Revenge trading after a loss
Revenge trading is the trade you take to win back the last one: minutes after a loss, often bigger than usual.
Revenge
- The trigger
- A loss that feels unfair, like a stop hit by one wick before price goes your way.
- Counter-rule
- After any loss, a 15 minute break and one written line before the next order. Two losses and the day is over.
The urge peaks right after the loss, so the rule works on time: a break and one written line let it pass.
Write a pulse before the next order
Go deeper
Revenge
- On the chart
- A new trade on the same pair minutes after a stop, often in the other direction, with no setup behind it.
- In the record
- Trades opened within minutes of a loss, at a bigger size and with worse results, and losses that cluster on one day.
A revenge trade is sometimes in the opposite direction, because the market "owes" you. It is one of the fastest ways to turn a normal losing trade into a losing day. Professionals are not immune: a study of Chicago futures traders found that those who lost in the morning were more likely to take above-average risk in the afternoon.
The second part of the rule, two losses and the day is over, caps the damage on the days the break is not enough. Write the pulse before you look for another trade: it records what you thought before you knew how the day ended.
FOMO: chasing a move that already left
FOMO, the fear of missing out, is chasing a move you were not in. The entry comes from the move you missed, not from a level in your plan.
DT Terminal ChartsGBPUSD · H1Chase vs planFOMO
- The trigger
- A big move you were not in, or other traders posting their wins.
- Counter-rule
- If price has left your level, the trade is gone. Set an alert at the level and let price come back, or let it go.
Far from a level there is nowhere sensible for the stop. A tight one sits inside the ordinary pullback and gets hit. A wide one risks far more than the trade can make.
The chase and the plan, in numbers
FOMO
- On the chart
- An entry at the top of a long run of candles with no pullback, far from any level.
- In the record
- Entries a long way from your levels, poor reward to risk, and stops hit on the first ordinary pullback.
Worked example
Example 02: The chase and the plan, on the same move
The worked example, with every number walked through, is in the app.
Overconfidence and boredom
These two look like opposites, but both put on a trade the plan did not ask for.
Overconfidence follows a winning run. The checklist gets shorter and the size bigger, right before the normal losing run every strategy has.
Overconfidence
- Counter-rule
- After a win of 2R or a run of three winners, the next trade gets the full checklist and the normal size.
Boredom follows hours with no setup. You take a small trade, on a pair you do not normally trade, with no setup behind it.
Boredom
- Counter-rule
- Outside your session or without a setup, close the platform. A day with no setup is a result, so log it anyway.
Go deeper
Overconfidence
- On the chart
- Setups that meet three of your five rules taken anyway, at a bigger size than usual.
- In the record
- Size and trade count rising after a run of wins, and rule breaks bunched up after green days.
- The trigger
- Three or four winners in a row, a green week or a new account high.
Three or four winners feel like proof that you have figured the market out. The losing streak math does not care how the last four trades went. In a study of over 60,000 households' brokerage accounts, the ones that traded most earned the least, a gap the researchers linked to overconfidence.
Boredom
- On the chart
- Trades in dead hours, in tight ranges, on pairs you do not normally trade.
- In the record
- Trades outside your session and on instruments not in your plan, mostly small and mostly losing.
- The trigger
- Hours with no setup, and the feeling you should be doing something.
Hours of watching make you feel you should be doing something. Small trades add up, and they also train you to click without a reason. A day with no setup is a good day: you get paid for taking your setups, not for being busy. If the market gives you nothing in your window, log the day as no trade and close the platform.
Find them in your own record
In the moment, each emotion feels like a good reason. The record is where they show. Here is the lesson on one table.
| Emotion | What you see in the record | Counter-rule |
|---|---|---|
| Fear | Missed setups that would have won, average wins far smaller than the targets you planned, lots of trades closed by hand in profit. | Risk an amount you can lose without flinching, and close a trade only at the stop, the target or a point the plan names. |
| Greed | Size that jumps on some trades, and trades that were up 1.5R or more and closed at breakeven or a loss. | Size comes from the risk rule before the order, and the target moves only by a rule written in the plan. |
| Revenge | Trades opened within minutes of a loss, at a bigger size and with worse results, and losses that cluster on one day. | After any loss, a 15 minute break and one written line before the next order. Two losses and the day is over. |
| FOMO | Entries a long way from your levels, poor reward to risk, and stops hit on the first ordinary pullback. | If price has left your level, the trade is gone. Set an alert at the level and let price come back, or let it go. |
| Overconfidence | Size and trade count rising after a run of wins, and rule breaks bunched up after green days. | After a win of 2R or a run of three winners, the next trade gets the full checklist and the normal size. |
| Boredom | Trades outside your session and on instruments not in your plan, mostly small and mostly losing. | Outside your session or without a setup, close the platform. A day with no setup is a result, so log it anyway. |
Test yourself: pick the emotion most likely behind each decision.
Interactive tool
Emotion self-check
This interactive tool runs in the app, with your own numbers.
Then catch each one as it happens:
- a short note on what you feel, before the next order;
- your state written down before each session;
- a tag, such as FOMO or Revenge, on every trade an emotion pushed you into;
- the setups you skipped, and why, kept apart from real trades;
- a weekly look at which emotion showed up most.
Compare your results by emotion in Analytics
Go deeper
Catch each emotion while it is happening, before hindsight rewrites it. Use the same few tags, such as FOMO, Revenge or Anxious, the same way every time, so a feeling becomes something you can count. In the weekly look back, note what triggered the emotion that showed up most, and which counter-rule you will hold next week. In Analytics, compare each tag's win rate and average R with your other trades.
If your trades sync from your broker, you cannot leave the revenge trade out of the record or quietly forget the oversized one.
Check yourself
Quick review · 0 of 0