Risk and psychology
FOMO (fear of missing out)
Definition
Buying after a move has already left the level because everyone else seems to be making money. The entry is late, so the stop is far and the room to the target is small.
Example
Say a stock breaks out above $50.00, and the plan was to buy at $50.20 with a stop at $49.50 and a target at $52.00: $0.70 of risk for $1.80 of reward. Chasing it at $51.40 with the same stop and target means risking $1.90 to make $0.60. The stock and the level did not change; only the late entry turned the trade upside down.
Hypothetical numbers, for illustration only.
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