Double Down: “Double down” is a term used to describe the act of increasing the size of a trade after a loss, in the hope of recouping the loss quickly. This strategy is often used as a way to try to make up for a losing trade, but it can be risky and can lead to further losses. It can be a form of self-sabotage, as traders may feel pressure to make up for losses and may not be thinking rationally about the trade. Instead of doubling down, traders should focus on sticking to their trading plan and risk management strategies, and avoid making impulsive decisions.
Rationalization through Time: “Rationalization through time” refers to the tendency of traders to justify their losing trades by saying that they would have been profitable if held longer. This can be a form of self-deception, as it allows traders to avoid taking responsibility for their mistakes and can prevent them from learning from their errors. Instead of rationalizing, traders should focus on analyzing their trades objectively, identifying the mistakes they made, and taking steps to improve their performance in the future.
Losing Control in trading: Losing control in trading can happen when traders become too emotional and make impulsive decisions. This can happen when traders become too focused on short-term gains and losses, and lose sight of their long-term goals and risk management strategies. Losing control can lead to over-trading, taking on too much risk, and making impulsive, emotional decisions that can lead to significant losses. To avoid losing control in trading, traders should focus on staying disciplined and sticking to their trading plan, and avoid making impulsive decisions based on emotions.