12.11What is revenge trading?
1What is it?
Revenge trading is immediately taking bigger, riskier trades to "win back" a loss.
2Why does it exist?
Anger replaces planning. It is one of the fastest ways to wipe out an account.
3Practical use
After a big loss or 2–3 losses in a row, stop for the day. Write down what happened before trading again.
4Quick revision
- Trading to recover losses emotionally.
- Bigger size, worse decisions.
- Stop after a set loss.
5Knowledge check
Q1. What emotion drives revenge trading?Show answer
Anger or frustration.
Q2. Best response after a big loss?Show answer
Stop trading for the day and review.
Q3. Why is it dangerous?Show answer
It increases size and lowers decision quality.