Overtrading

A description of frequency and size relative to a stated method, which is why it can only be identified against a written one. Without a rule specifying what qualifies as a position worth taking, there is no standard against which a count is too high, and the word becomes a judgement made after a poor run rather than a fact about conduct.

The arithmetic that makes it expensive is not psychological. Every round turn pays the spread and any commission again, so the total cost scales with the count while the expected result per position does not, and a method with a modest positive expectation can be turned negative by frequency alone. The extra positions are also the marginal ones, the cases the rule was least confident about, so they carry the method's worst expectation and its full cost at the same time.

The behavioural account offered for it is that activity rises after a run of results in either direction: after adverse ones because a loss invites recovery, and after favourable ones because a run changes how the next decision feels rather than what the method says. The conventional response is a limit on the number of positions in a period, enforced the same way a loss limit is, by being fixed in advance rather than judged in the moment.