Gambler's Fallacy

Believing past random outcomes change the odds of the next one.

The gambler's fallacy is the intuition that chance is self-correcting: after five coin flips land heads, tails feels 'due' — though the odds remain exactly 50/50. The name comes from a 1913 night at Monte Carlo when a roulette wheel landed black 26 times running and gamblers lost fortunes betting ever larger on red. Investors commit the same error when they assume a stock that has fallen for days must bounce, or that a string of winning trades makes the next one safer.

Convinced by the gambler's fallacy, he doubled his position because the stock had 'already fallen five days in a row.'