EncyclopediaEncyclopedia › Trading psychology ›
Gambler's fallacy
In one line: Thinking a win is 'due' after a string of losses.
Evidence
Tversky and Kahneman (1971): people expect small samples to look like the whole population (the 'law of small numbers'), which drives the gambler's fallacyThinking a win is "due" after a string of losses..
Tversky and Kahneman (1971): people expect small samples to look like the whole population (the 'law of small numbers'), which drives the gambler's fallacyThinking a win is "due" after a string of losses..
More videos on this (1)
- 12 Psychology Theories That Explain Why Traders Keep Making the Same Mistakes · Stick Trader · external
Five losses in a row do not make the sixth trade more likely to win. Each trade is its own draw. See Sample size and Risk per trade.
Further viewing
External videos are for viewing only: we don't use them as a factual source.
External video, for viewing only12 Psychology Theories That Explain Why Traders Keep Making the Same Mistakes
Stick Trader · open on YouTube
Stick Trader · open on YouTube
Related
Sources & studies
Last checked: 2026-11-04 · Educational, not financial advice.
Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.