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Psychology

Stake-vs-Survive

The sizing principle that a -100% outcome on any position must not compromise the trader's ability to continue trading. Stake is what you risk; survive is what you must preserve. Critical for memecoins because -100% is the modal outcome (98.6% of Pump.fun tokens end below $1,000 in liquidity), not a tail event.

See also
Psychology Max-Daily-Loss Cap A pre-committed maximum percentage of account capital that can be lost in a single trading session. When hit, the platform closes and the session ends. The cap is the Ulysses mast for tilt cascades — it removes the option of recovery trading, which is the only fuel the cascade needs. → Psychology Implementation Intention A pre-committed if-X-then-Y plan (Gollwitzer, 1999). Delegates action control to a situational cue, removing real-time deliberation from the requirement. Meta-analysis across 94 studies found effect size d=0.65 on goal attainment. The structural mechanism behind every effective trading defense. → Psychology Hot-Hand Fallacy The mistaken belief that a winning streak signals durable skill rather than noise. Causes traders to size up dangerously after consecutive wins, producing drawdowns larger than the streaks that preceded them. →
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