Under sharp threat, some people accelerate and some stop. The freeze is a physiological response, not a choice, and it arrives most often in the situations that matter most: a fast move against a large position, a gap, a cascade.
What is lost is the ability to generate options. The trader can see the screen and cannot select an action, and afterwards remembers watching it happen.
It is mostly prevented rather than treated. Resting stop orders act whether or not you can, rehearsed if-then rules reduce the need to generate a decision live, and smaller size keeps the threat below the level that triggers the response. See implementation-intention.
Related: hesitation, stress-response, panic-selling, implementation-intention