Gambler's Fallacy
The false belief that a series of losses makes a win 'due' — as if random markets keep track of what they owe you.
The gambler's fallacy is the mistaken belief that independent random events are connected — that after a run of losses, a win becomes statistically "due." It is not. Each trade is its own event. The market has no memory of your last five stop-outs.
It shows up in two costly ways: sizing up after a losing streak because "the next one has to work," and abandoning a valid strategy after a drawdown because "clearly it's broken now." Neither is rational. Drawdowns are built into every strategy's statistical profile.
The correct mental model is probabilistic: your edge plays out over hundreds of trades, not in any given sequence. A 60% win-rate strategy will have 5-loss streaks. That is math, not a sign from the market.