What is Revenge Trading ?

It’s quite common to see traders trying to immediately make back a significant loss. This is what we call revenge trading. It doesn’t matter if you want to be a technical analyst, a day trader, or a swing trader – avoiding emotional decisions is crucial.

It’s easy to stay calm when things are going well, or even when you make small mistakes. But can you stay calm when things go completely wrong? Can you stick to your trading plan, even when everyone else is panicking?

Notice the word “analysis” in technical analysis. Naturally, this implies an analytical approach to the markets, right? So, why would you want to make hasty, emotional decisions in such a framework? If you want to be among the best traders, you should be able to stay calm even after the biggest mistakes. Avoid emotional decisions, and focus on keeping a logical, analytical mindset.

Trading immediately after suffering a big loss tends to lead to even more losses. As such, some traders may not even trade at all for a period of time following a big loss. This way, they can get a fresh start and get back to trading with a clear mind.

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