The Big Four Biases
Loss aversion: losses hurt roughly twice as much as gains please, driving the classic cut-winners-hold-losers inversion. Revenge trading: escalating size after losses to 'get it back' — the account killer, identical to betting tilt. Overconfidence: bull-market gains attributed to skill, answered with size increases at exactly the wrong time. Recency bias: three winners feel like a hot streak, three losers like a broken strategy; both are usually noise.
Process Defenses
Rules beat willpower: written entry/exit/size criteria decided before the session, hard stops placed at entry, and a daily loss limit (e.g. 3 losers or -2% = done for the day) that ends sessions before tilt does. The 1% sizing rule is itself psychological armor — trades small enough that no single outcome triggers the survival brain. Checklists before entry catch impulse trades reliably.
The Journal: Your Objective Witness
Log every trade: setup, size, emotion at entry, outcome, rule adherence. Review weekly. The journal converts vague self-narratives into data — most traders discover their losses cluster in a specific identifiable state (post-loss frustration, boredom trades, oversized 'conviction' plays) within a month of honest logging. What gets measured gets managed; what stays anecdotal stays broken.