There’s something electric about closing a trade in profit. Relief. Pride. A little adrenaline. For many traders, me included, that moment feels like a high: you proved the strategy works, your edge paid off, and risk receded.
But there’s a catch: that feeling often triggers a kind of “post-win overtrading” — adding trades the rest of the week that weren’t part of the original plan, chasing setups without backtesting, or ignoring risk rules. Sometimes we give back gains; sometimes we blow them.
Here’s why that happens — what the research shows, why it’s so hard to avoid — and concrete tricks I (you) can use to prevent doing it.
📚 What the Research and Psychology Say
- Cognitive & Emotional Biases
- Overconfidence: After a few wins, people tend to overestimate their ability, believe they can repeat wins easily, and trade more aggressively. A study “Overconfidence and (Over)Trading: The Effect of Feedback” found that traders who receive positive feedback tend to trade more but with worse performance. ScienceDirect
- FOMO: Fear of missing out kicks in when others are making money, or the market is moving — and your intuition says “jump in.” This is well-documented in behavioral finance. CFI – Empower Yourself+1
- Revenge Trading & Loss Aversion
- Although your scenario is about wins, many of the same impulses show up: wanting to “lock in more,” “make the week perfect,” or undo losses. A lot of traders get into cycles of trying to compensate for earlier underperformance. When trades go well (or even average), the desire to push that edge often leads to risk creep or trades outside of plan. Warrior Trading+1
- Loss aversion: we feel losses more intensely than gains. A winning trade might give us confidence, but because losses sting more, we sometimes overreact after profits to avoid how losses feel. arXiv+1
- Overtrading & its Hidden Costs
- Transaction cost, slippage, mental fatigue. Small tilted trades mean fees add up, mistakes happen when you trade junk setups, and your risk management loosens. Research from experiments shows that subjects who trade too often often reduce overall wealth vs people who trade less with discipline. arXiv+2optionstrading.org+2
- Impulsivity, boredom, or simply wanting to feel productive can lead to overtrading. Trading when market conditions are not good (low edge) or when setups are marginal, just because “something feels possible,” typically hurts more than helps. TradingView+2optionstrading.org+2
🔍 Why It Happens After Profits
You close a trade successfully. That relief/achievement rewires your mood. The brain rewards you. Then you see another move, and that tug-of-war starts:
- “I just proved my strategy works — maybe I can do more.”
- “What if I miss out if I don’t enter now?”
- “If I can make 5%, maybe I can make 10%.”
These thoughts are logical, but often they’re not based on the same level of research, risk, or edge as your planned trades. So you trade when your system says wait. Or trade larger when your plan says stay consistent.
🛡️ How to Avoid Trading “After the Win” Mistakes
Here are tactics (many from psychology/trading literature + personal practice) to guard against this behavior:
| Practice | What It Does | How to Apply in Your Setup |
|---|---|---|
| Pre-trade checklist | Forces discipline; ensures every trade meets your rules | Always check ¬ whether the trade fits the 2/7 DC plan, ¬ position size, ¬ risk threshold, ¬ whether backtests show similar trades in that week worked. |
| Trade-frequency cap | Limits impulse trades | For instance: only 2 trades/week for 2/7 DCs, and maybe 1 small experimental trade if edge is clear. When limit is hit, stop. |
| Profit target rules + time-based hold rules | Prevents early temptation and overtrading | E.g. “if a DC reaches +5% and/or delta rule triggers, close; otherwise hold thru expiry.” Have these defined in writing. |
| Journaling emotional state | Helps introspection and recognition of emotional triggers | After each trade, note if you felt tempted to add more. What made you think of adding more? Did I follow plan or emotion? |
| Scheduled review vs “reactive trading” | Separates action from emotion | Instead of trading mid-week just because market looks good, wait for review sessions. Only trade if plan says yes. |
| Mindfulness / Emotional Pause | Gives your brain time to cool down before acting | After a winning trade, wait an hour. After a loss, take a break. Step away from screens. Don’t chase. |
| Accountability / Rules | External constraints force consistency | Maybe a rule that says “no trades outside Mon/Tues for DCs” or “no trades after taking profit X% in day unless chart clearly justifies it.” Something that isn’t emotional. |
🏗️ How I’m Applying These to My Challenge
Here’s how I’m using the psychological insights + rules to prevent overtrading:
- My main strategy (2/7 DC) is only active Mondays & Tuesdays. That’s baked in. Any new trade outside that needs stronger justification + backtest.
- I limit allocation per trade & have stop/delta exit rules. I write down every trade & emotion.
- If I close a profitable trade early (say +5%), I resist opening something new just because I’m “riding the momentum.” I pause and review.
- I use journaling to note when I feel FOMO or greed. When I see these triggers, I recognize them. I don’t act on them.
- I hold myself publicly accountable via this blog: every overtrading moment, every deviation, I reflect on it. That externalizing helps reduce emotional drift.
🛠️ What Research Suggests for Long-Term Behavior Change
- Behavioral Finance & Prospect Theory shows that people are risk-averse over gains (they dislike giving back gains) and risk-seeking after losses. Being aware of those tendencies helps anticipate when you’ll want to “lock in” or “get back.” arXiv+1
- Laboratory Experiments (like “Do investors trade too much?”) showed that more frequent trading (without a plan) leads to worse outcomes. Less frequent, more planned trading leads to higher wealth in sample markets. arXiv
- Overtraders often show signs similar to impulsivity and compulsivity — research likens overtrading to behavioral addiction patterns. Tools from psychology (Cognitive Behavioral Therapy — CBT, mindfulness) help. TradingView+1
✅ Conclusion
Closing trades profitably does feel amazing. You deserve that. But the danger comes after — when the emotional high nudges you into trades you didn’t fully plan or test.
The 1000 Days Challenge has been helping me see this clearly. By writing trade rules, sticking to them, documenting emotions, and putting structural limits around when and how I trade, I’m slowly rewiring the habits that lead to overtrading.
So if you find yourself tempted to add more trades after a win, or you feel you “shouldn’t miss out” — take a breath. Check your plan. Check the backtest. If it doesn’t meet your rules, don’t click.
Because every trade is optional. And the edge comes from consistency, not from feeling smart in the moment.