Revenge Trading: How to Stop This Account Killer

You took a loss. Now you want to "get it back." This impulse has destroyed more trading accounts than any technical mistake.

What is Revenge Trading?

Trading immediately after a loss with the goal of recovering money rather than following your strategy. It's emotional, not logical.

Signs You're Revenge Trading

• ❌ Entering trades within minutes of a loss
• ❌ Increasing position size to "recover faster"
• ❌ Taking lower-quality setups you'd normally skip
• ❌ Feeling angry, frustrated, or desperate
• ❌ Breaking your own trading rules
• ❌ Thinking "I need to get this back TODAY"

Why It's So Dangerous

The math of revenge trading:

• First loss: -1%
• Revenge trade (angry, no setup): -2%
• Double down (desperate): -4%
• One more try: -3%
• Daily drawdown breached: Account terminated

A -1% loss became account termination in 4 trades.

The Psychology Behind It

• Loss aversion: Losses feel 2x worse than equivalent gains feel good
• Ego protection: "I can't be wrong"
• Sunk cost: "I've already lost, might as well keep trying"
• Dopamine chasing: Need the "win" feeling

How to Stop Revenge Trading

Rule 1: The 2-Loss Rule

After 2 losses in a row, you're done for the day. No exceptions. Walk away.

Rule 2: The 30-Minute Rule

After any loss, wait 30 minutes before trading again. Set a timer.

Rule 3: Physical Reset

After a loss:

1. Stand up
2. Walk away from computer
3. Do something physical (walk, stretch, exercise)
4. Only return when calm

Rule 4: Journal the Emotion

Before any trade after a loss, write:

• "Am I trading my plan or my emotions?"
• "Would I take this trade if I hadn't just lost?"
• "Is this an A+ setup?"