Trading Psychology

Revenge Trading: How to Stop Losing Control After a Loss

Revenge trading is the fastest way to turn a bad day into an account-ending catastrophe.

Key rules

  1. Set a daily maximum loss limit and honour it without exception
  2. After a loss, close the platform and take at least a 30-minute break
  3. Never increase position size to 'recover' a loss
  4. Log the emotional state that preceded revenge trades
  5. A losing day is a small setback; revenge trading is a critical event

After a loss, the emotional brain seeks to 'recover' the money immediately. This leads to increasing position sizes, ignoring the trading plan, and forcing setups that don't exist. The result is compounding losses far beyond the original.

The solution is a mandatory break after a defined loss threshold. If you hit your maximum daily loss (typically 1–2% of account), close the platform and step away.

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