Trading Psychology EP 1: The Hidden Danger of Revenge Trading
Have you ever felt the urge to immediately enter a new trade right after a losing one?
That’s revenge trading.
And it quietly destroys more trading accounts than most people realize.
What Is Revenge Trading?
Revenge trading happens when emotions take control after a loss.
Instead of following your plan, you feel the need to “get your money back.”
The focus shifts from high-quality setups to emotional decisions.
You may find yourself:
- Entering trades too quickly.
- Increasing lot size to “recover faster.”
- Taking trades that don’t fit your system.
- Ignoring risk management.
In that moment, it feels justified. But in reality, you’re no longer trading your edge — you’re trading your emotions.
Why Is Revenge Trading So Dangerous?
The biggest danger is compounding mistakes.
- You take one revenge trade.
- It loses.
- Now your emotions spike even more.
- You take another trade with even more size.
- The losses grow.
What started as a small, controlled loss turns into a dangerous spiral. Many traders blow up accounts this way.
Worse: even if a revenge trade wins, it teaches your brain the wrong lesson — that breaking your rules can work.
The Psychological Trap
Revenge trading is powered by natural emotions:
- Anger (“I shouldn’t have lost!”)
- Frustration (“I knew better!”)
- Fear (“What if I don’t recover?”)
- Shame (“I failed again.”)
These emotions create an intense need for immediate relief.
Your brain sees the next trade as the “solution” to end the discomfort.
But in truth, it only feeds the cycle.
Real Stories: How Revenge Trading Can Destroy Good Traders
Mark, the Experienced Day Trader
Mark had been trading full-time for 3 years.
He built a solid system and was doing well.
One day, after a normal losing trade, he felt frustrated.
He increased his lot size on the next trade, thinking he could recover quickly.
That second trade lost even more.
Now panic kicked in.
Within two hours, Mark had taken seven trades — none of them part of his plan.
By the end of the day, he wiped out 15% of his account.
It took him six months to emotionally recover and rebuild confidence.
Lisa, the Prop Firm Trader
Lisa was doing her funded challenge.
She had strict rules — but after a surprise news event caused a sudden loss, she felt the pressure.
She immediately entered a revenge trade, breaking her daily loss limit.
The account got disqualified the same day.
Lisa later said:
“The hardest part wasn’t losing the money — it was losing control of myself.”
David, the Beginner
David had just started trading.
Every time he lost, he doubled his position size to make the money back faster.
Sometimes it worked — which made the habit stronger.
Then one day the market moved sharply against him.
A small loss turned into a full account blow-up.
David quit trading, thinking he was a failure — when in reality, it was the revenge cycle that failed him.
You’re Not Alone
Almost every trader battles revenge trading at some point.
The goal is not to be perfect, but to build systems that protect you from yourself.
Trading is 20% strategy — and 80% psychology.
Stay calm.
Stay patient.
Follow your plan.
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