Decision Fatigue

Decision fatigue is the decline in the quality of decisions after a long sequence of them. For a trader it can build over a session spent watching screens, managing several positions, and repeatedly choosing whether to act; later choices tend to become either impulsive or avoidant, and the checklist that felt easy in the morning starts getting skipped. It is a process risk rather than a market risk, but it lands on the same account, and it helps explain why the last trade of a long day is often the least considered. Common structural responses are limiting how many instruments are monitored, using pending orders and price alerts instead of continuous watching, and setting a fixed end to the session regardless of the day's result.