Revenge trading
An attempt to win a loss back immediately. The fastest way to lose what is left of the account.
Revenge trading — what it is?
Revenge trading is an attempt to win back what you have just lost, immediately. The next trade is opened not because a setup appeared but because the previous one ended in a loss.
It usually comes with increased size: if you have to make it back fast, the size has to be bigger.
The combination of the two — an entry with no basis and raised risk — makes this the fastest way to lose an account.
- Before — account 100 000 ₸, a loss by the rules of −1 000 ₸
- Payback ×3 — entry at triple size to get it back in one go. Loss −3 000 ₸
- Payback ×5 — now you need 4 000 ₸ back. Entry at five times size. Loss −5 000 ₸
- One hour later — −9 000 ₸ instead of −1 000 ₸, and all three entries were without a setup
- The tell — If you can name the sum you "have to win back" — you are no longer trading
Revenge trading — how it is built?
The only reliable defence is a break set in advance. For example: after two losses in a row, trading is done for today. The rule only works if it is written down beforehand rather than decided afterwards.
Revenge trading — common mistakes
Opening a trade right after a loss.
Increasing size to win it back in one trade.
Thinking the market "owes" you what you lost.
Cancelling your own break rule at the very moment it triggers.