Lessons › Why traders lose › What tilt looks like
World 11 · Why traders lose · lesson 24 · level 2
What tilt looks like
Tilt is trading while a loss still stings, and it shows in four signs: bigger size, faster trades, a skipped stop, and "I'll win it back today".
In one line
Tilt has four warning signs. The first three are easy to see; the fourth sounds like a plan, so it slips past you.
Explained simply
Tilt is trading while a loss still stings, and it has four signs. One: your size, how much you put into a trade, grows because the last trade lost. In one study, even professional traders regularly took above-average risk in the afternoon after a morning loss. Two: you trade faster, clicking whatever moves instead of waiting for your setup, the chart picture you trade. Three: you skip your stop, the price where you planned to give up. Four: you decide to win it back today. It sounds like a plan, but the loss is picking your next trade.
Mistakes to avoid
- Making the next trade bigger because the last one lost.
- Clicking the next thing that moves, minutes after a loss.
- Skipping the stop "just this once" because it will come back.
- Treating "I'll win it back today" as a goal instead of a warning sign.
Check yourself
What is tilt?
Trading while a loss still stings. Tilt is trading while a loss still stings. The loss, not your plan, starts picking your trades.
Which of these is one of the four signs of tilt?
Making the next trade bigger after a loss. A bigger size after a loss is sign one. Waiting for your setup and setting the stop first are the opposite of tilt.
Why does the fourth sign, "I'll win it back today", slip past so easily?
It sounds like a goal, but the loss is picking your next trade. It sounds like a plan, so it feels sensible. That one sentence turns a single loss into a losing day.
In one study, what did professional traders often do after losing money in the morning?
Took above-average risk that afternoon. Coval and Shumway (2005) found they regularly took above-average afternoon risk to recover morning losses. Tilt is not only a beginner's problem.
Your normal size is 1 unit. Minutes after a loss, you place 2 units on a chart you had not planned to trade. Which signs show?
A bigger size and faster trades. Going from 1 unit to 2 after a loss is sign one. Clicking an unplanned trade minutes after the loss is sign two.
Goal of this lesson: Spot the four signs of tilt in yourself before you place the next trade.