Glossary › chasing

Trading glossary · psychology

chasing

Jumping into a trade after price has already run far, because you are scared of missing out.

The fuller meaning

Entering late after an extended move, often out of FOMO, which puts the stop far away and the target close and so worsens risk-to-reward. Chasing a marubozu or a fourth candle after a big three-candle run are classic mistakes; the fix is waiting for a planned entry such as a pullback.

chasing, also called chase.

Related words

anchoring · boredom trading · cognitive bias · confirmation bias · consistency · cool-down rule · discipline · disposition effect · emotion · entry rule