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Market Intelligence › Basic Terminologies
FOMO, revenge trading, bias, tilt, discipline — the mistakes that have names
Published by The Retail Trader · AUG 06, 2026 · Trading Psychology
Most traders do not lose because of their analysis — they lose because of their own reactions. And the interesting part is that these mistakes are so common that they have proper names. The benefit of knowing the names is that when the mistake is happening, you can recognise it midway.
Sitting in front of the screen, these four or five things keep coming back:
• Fear — The fear of loss, because of which even a good setup is missed or a trade is closed too early.
• Greed — Trying to stretch a profit further, until that profit is gone.
• FOMO (Fear of Missing Out) — The move has already happened, yet you chase it and enter. This entry is often at the exact top or bottom.
• Hope Trading — The stop loss has been crossed, but you keep the position on hope. This is where a small loss becomes a big one.
• Euphoria — The overconfident phase after a string of wins, where size suddenly doubles.
• Panic Selling — Selling everything without thinking during a fall, often right near the exact bottom.
• Analysis Paralysis — So much analysis that the trade never gets taken.
• Tilt — The emotional state after one bad trade, where every following decision keeps getting worse.
These are actions — easy to catch because they show up clearly in the journal:
• Revenge Trading — Taking a bigger trade right after a loss to earn it back.
• Overtrading — More trades than necessary, often out of boredom or to make up for a loss.
• Averaging Down — Adding more quantity to a losing position, hoping the average will improve.
• Cutting Winners, Holding Losers — Booking profit early and holding losses for a long time. This is exactly the opposite of what works.
• Moving the Stop Loss — Shifting the stop further back so the trade is not proven wrong. The biggest loss of the day often comes from this single mistake.
• Chasing — Running after every fast-moving stock, with no level or plan.
• Tip Trading / Herd Mentality — Taking a trade on someone else's call, without knowing where its stop is.
• Position Size Creep — Slowly increasing size until even a normal loss starts to feel big.
• System Hopping — Switching to a new strategy every two weeks, so no system ever gets a chance to run.
These are mental shortcuts that work in normal life but are expensive in the market:
• Confirmation Bias — Looking only for the news and charts that justify your existing position.
• Recency Bias — Giving too much weight to the last two or three trades.
• Anchoring — Clinging to one old price as if it were the true value.
• Loss Aversion — Feeling the pain of a loss more than the joy of a profit, which makes booking a loss difficult.
• Overconfidence — Thinking you are bigger than the market after a few wins.
• Hindsight Bias — Looking at the left side of the chart and feeling 'that was obvious'. It was not obvious live.
• Survivorship Bias — Seeing only the stories of winners, because the losers do not post.
• Gambler's Fallacy — Believing that after four losses a win is now 'due'. The market does not remember your record.
• Sunk Cost Fallacy — Holding a position only because you have already put a lot of money and time into it.
• Lottery Bias — Buying a cheap OTM option because its payoff looks big, however low the probability.
Emotion is not suppressed; a system is built around it:
• Trading Plan — A written rule set: what you will trade, in what size, where the stop is, where the exit is.
• Checklist — Fixed questions asked before entry, so that mood does not make the decision.
• Trading Journal — A record of every trade with the reason and the emotion. This gives the most honest feedback.
• Rules-Based System — Less discretion, more conditions — so the same process runs every day.
• Pre-Market Routine — Preparing levels and the plan before the market opens, not after it opens.
• Cooling-Off Period — A short break after two consecutive losses, so that tilt does not go further.
• Screen Time Limit — The easiest way to trade less: look at the screen for less time.
• Process vs Outcome — A good process sometimes gives a loss and a bad process sometimes gives a profit. Always judge the process.
• Review Routine — At the end of the week, going through all trades to find patterns.
And finally, the words that build a career, not a single trade:
• Consistency — The same process every day, whatever the result.
• Patience — Waiting for the setup, not forcing the market.
• Detachment — Not forming an emotional attachment to a position; it is just an idea that may be right or wrong.
• Compounding — Small, consistent returns growing over time. For this, survival is necessary, the most necessary thing of all.
• Drawdown Recovery — The plan for getting out of a bad phase: smaller size, tighter rules, confidence returning slowly.
• Screen Experience — The learning that comes only from sitting in front of the market, not from any course.
• Edge Trust — Trust in your own system, which comes only when its data is in your own journal.
• Boredom Tolerance — Doing nothing is also a position. On most days it is the best position.
Most psychology comes from the condition of your money, not from your chart:
• Risk Capital — Money you could lose entirely and still have your life go on normally. Trading should be done with this.
• Scared Money — Capital that you need (fees, EMI, rent). Every trade taken with it gets closed early, because every red number frightens you.
• Borrowed Capital — Money from debt or a loan. It comes with time pressure, and time pressure breaks every rule.
• Emergency Fund — A separate fund for expenses, because of which you never have to close a position at the wrong time.
• Position Size vs Sleep — A practical test: if a position keeps you awake at night, the size is too big for you — whatever the spreadsheet says.
• Income Expectation — Expecting a fixed income from trading every month. The market does not pay a monthly salary, and this expectation is the most common cause of overtrading.
• Opportunity Cost — Missing another, better trade because you are stuck in one trade.
• Comparison Trap — Measuring your results against other people's screenshots, without seeing their risk, size or losses.
• Lifestyle Creep — Raising expenses after one good month, which doubles the pressure of the next bad month.
And finally, the words that describe the learning phases of every trader:
• Beginner's Luck — Profit made at the start without a system, which gives confidence but no lesson.
• Learning Curve — The long phase where knowledge is growing but results are not yet visible.
• Demo to Live Gap — A system that seemed easy in paper trading becomes hard with live money, because emotion is now involved.
• Information Overload — So many sources and strategies at once that not even one gets followed properly.
• Mentor vs Guru — A mentor teaches process and points out mistakes; a guru only gives calls. Depending on the second never builds skill.
• Paper Confidence vs Live Confidence — Trust in a backtest and trust in your own live journal are two different things. Only the second is of use.
• Plateau — The phase where improvement stops. Here the problem is often not knowledge but execution.
• Deliberate Practice — Working on one thing every week, such as only entry timing or only SL discipline.
• Unconscious Competence — The stage where the right decision happens without thinking, because the process has become a habit.
• Survivor's Routine — The common habits of those who last a long time: small size, a written plan, and regular review — not some secret indicator.
Analysis takes months to learn, and handling yourself takes years. That is why this journal is the last part of the series on terminology — because all the other words work only when the person following them is steady.
This journal is for education only — it is not a buy or sell recommendation.