Judging each trade in isolation instead of as one draw from a long sequence, which makes normal losses feel like catastrophes.
A single trade viewed alone is a coin flip you either win or lose. The same trade viewed as number 214 of several thousand is a routine sample from a distribution with positive expectancy.
Narrow framing makes losses unbearable and therefore makes rule-breaking irresistible. If this trade must work, moving the stop is reasonable. If this trade is one of thousands, moving the stop is vandalism of the whole series.
Widen the frame on purpose. Review in blocks of twenty or fifty trades. Report results in R. Put the equity curve, not the current position, on the screen you look at most.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Expectancy: the average trade. Forty trades sorted by outcome: 24 small losses and 16 larger wins. Weighting each side by how often it happens gives the average result per trade, marked here by the dashed line at +$120.
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