Very good article ST !!
1. Many traders try to predict the trade sequences .. (for eg:, if 5 trades are winners in a row, then they expect the sixth trade to be a loser and would not pull the trigger or would reduce the size drastically expecting a losing trade) .. The worst part is when we reverse the situation..if 5 trades are losers in a row, then they increase their size for the 6th trade expecting a winner. But, market gives another losing trade. Now, they are deep hole(both mentally and financially). it is often easy to come out of financial ruin but if we drain our mental capital, it will create chaos. Sequencing assumption can be very fatal in trading !! Most of us dont talk about it but this bias is very real.
2. Article says "Over time, it is a virtual certainty that at some point all traders will suffer a long series of losing trades." - Many of us think that it would never happen to us. But over a period of 1000/10k trades, it will happen. There is no guarantee in trading but this is a done deal !! So, preparing for the worst case scenario would save us from the 'rare' event of hitting the worst case scenario.
Happy trading all