A series of losing trades will cause market sentiment to shift, leading traders to become cautious, shorts to become confident, and requiring a strong catalyst to re-energize the market.
"So, if that happens, you know, on several trades, then all of a sudden, sentiment in the market is going to start to shift. Traders, including myself, are going to be like, "Oh, it's feeling pretty choppy today. I don't know. I better slow down." And then that hurts any additional setups that we might see. And then that becomes kind of this negative feedback loop where traders get increasingly cautious, shorts get increasingly confident and we have to really ease off uh you know take our foot off the gas until the next stock that has a really strong catalyst that overpowers even aggressive short sellers."