Many traders commonly enter revenge mode trading after a trade, which they were sure would be a success, but went wrong causing money loss especially if that loss was greater than what he could handle.
As they get angry, they may try to make up for the losses by jumping into the market again and they are likely to fail and have a greater loss than the previous one.
Here are the causes.
A good technique is that before placing any trade you should always assume that it’s going to be a loser and consider how much you are willing to lose on the trade. This way, if you lose, you will be ready for it and will better deal with it. Then you should take lesson on why you lost and simply have to forget about it otherwise it will affect your next trade. If necessary, take some break and don’t trade, for example, for another 24 hours – until you are sure that you are out of an emotional state of mind that will make sure that your next trade is not a revenge trade and is completely unconnected from the last one. Only this way you will progress to being a winner from being a loser.
As they get angry, they may try to make up for the losses by jumping into the market again and they are likely to fail and have a greater loss than the previous one.
Here are the causes.
- You hurry so much to win back your losses that you don’t spend time on planning it out properly by analyzing risk and considering the exit points.
- With a desperate logic you will probably have at that time you will find that the quickest way to win back your money is to raise the size of your stake again completely ignoring the risk.
A good technique is that before placing any trade you should always assume that it’s going to be a loser and consider how much you are willing to lose on the trade. This way, if you lose, you will be ready for it and will better deal with it. Then you should take lesson on why you lost and simply have to forget about it otherwise it will affect your next trade. If necessary, take some break and don’t trade, for example, for another 24 hours – until you are sure that you are out of an emotional state of mind that will make sure that your next trade is not a revenge trade and is completely unconnected from the last one. Only this way you will progress to being a winner from being a loser.