Sunk cost and the trade that must be saved

[Shadow Trader]

Hours spent researching a pair, a perfect setup, a long wait for the signal. Then the trade goes wrong, and part of the mind says that all that effort deserves a rescue.

That's the sunk cost fallacy. Time and effort already spent are gone, and they don't change the odds of the next tick.

It shows up in behaviours like adding to a losing position, hoping for a bounce that justifies the earlier entry, or refusing to close because closing makes the loss real.

A practical antidote is a pre-trade statement of what invalidates the idea. Write it down: if price closes below this level, the setup is wrong. When that happens, closing is simply following the plan.

Another is a post-trade question: if this had been a stranger's trade, what advice would be given?

Time spent waiting for a setup is also sunk. Patience that ends in a loss was still the right process, and the wait is not a debt the market owes back.

What invalidation rule was written before the last losing trade?