Revenge Trading

This is a discussion on Revenge Trading within the General Trading Chat forums, part of the Reception category; Revenge trading occurs when after losing a trade, you immediately enter another trade. Most of the time the second trade ...

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Old Jun 2, 2009, 12:50pm   #1
Joined Dec 2007
Revenge Trading

Revenge trading occurs when after losing a trade, you immediately enter another trade. Most of the time the second trade you enter is not a valid trade, based on your system, but rather, it does not obey some of the rules, and you take that trade on impulse.


Why does this happen ?
This happens largely due to the fact that you have lost money on trade #1, and now are angry at the market for taking your money, and you want it back. You immediately look for another trade, one that obeys some, but most surely not all of your rules and enter it. You want your money back, and you want it as quickly as possible, that's why you e
nter another trade. However, after some time you realise that the trade is not good, and is not acting in your best interest, and you close it for another loss.

What is the solution ?
After a losing trade, or several lost trades in a row, close your trading software and do something else besides trading, that will clear your head. Read something, watch TV, etc, but resist the temptation to trade. Call it a day, i think this would do you and your account better than looking for potential trades. There is always tomorrow.

It takes discipline to win in this forex trading game, without discipline and proper money and risk management you're account will reach margin call in no time.

What happened today was that i lost 3 trades in a row. I obeyed my system, didn't take any loose trades, but it turned out that all 3 trades moved after a while in the opposite direction, as seen here. It happens. You can't win 'em all.

After I closed all of the 3 trades, I looked at the market for another opportunity, and took it, shorting the USDJPY at 95.62.
After a while however, this trade also turned a couple of pips against me, and for fear of not losing again, i closed it rather quickly for a $2 loss.

We are human, and it's normal to have emotions, even when trading. It's important however, to control our emotions and not to impulse-trade.

I'm calling it a day. See you tomorrow
What are your experiences of such a behavior ?
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Old Jun 2, 2009, 1:58pm   #2
Joined Sep 2008
i disagree

Revenge trading occurs when after losing a trade, you immediately shoot the nearest trader to your right
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Old Jun 2, 2009, 7:30pm   #3
Joined Feb 2009
Quote:
Originally Posted by BBPI_FXTrader View Post
Revenge trading occurs when after losing a trade, you immediately enter another trade. Most of the time the second trade you enter is not a valid trade, based on your system, but rather, it does not obey some of the rules, and you take that trade on impulse.


Why does this happen ?
This happens largely due to the fact that you have lost money on trade #1, and now are angry at the market for taking your money, and you want it back. You immediately look for another trade, one that obeys some, but most surely not all of your rules and enter it. You want your money back, and you want it as quickly as possible, that's why you e
nter another trade. However, after some time you realise that the trade is not good, and is not acting in your best interest, and you close it for another loss.

What is the solution ?
After a losing trade, or several lost trades in a row, close your trading software and do something else besides trading, that will clear your head. Read something, watch TV, etc, but resist the temptation to trade. Call it a day, i think this would do you and your account better than looking for potential trades. There is always tomorrow.

It takes discipline to win in this forex trading game, without discipline and proper money and risk management you're account will reach margin call in no time.

What happened today was that i lost 3 trades in a row. I obeyed my system, didn't take any loose trades, but it turned out that all 3 trades moved after a while in the opposite direction, as seen here. It happens. You can't win 'em all.

After I closed all of the 3 trades, I looked at the market for another opportunity, and took it, shorting the USDJPY at 95.62.
After a while however, this trade also turned a couple of pips against me, and for fear of not losing again, i closed it rather quickly for a $2 loss.

We are human, and it's normal to have emotions, even when trading. It's important however, to control our emotions and not to impulse-trade.

I'm calling it a day. See you tomorrow
What are your experiences of such a behavior ?
Your point is well taken.
I started a thread on this subject entitled: "How to Avoid Going On Tilt".
I think you would find the responses to this thread very helpful when dealing with this issue.
You got to really like the trade before entering.
If you adhere to this, you will, never again, be taken by the trading demon (your emotions).

-Good Luck-

Last edited by mrsoul; Jun 2, 2009 at 9:34pm.
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Old Jun 2, 2009, 7:32pm   #4
 
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but nobody knew what "aoid" meant ......
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Old Jun 2, 2009, 9:48pm   #5
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Originally Posted by rathcoole_exile View Post
but nobody knew what "aoid" meant ......
Ha, giggles. Thailand ftw
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Old Jun 3, 2009, 9:51pm   #6
Joined Nov 2008
This reminds me of when I felt I'd made another personal breakthrough (of sorts) just a month or so after I started trading...I became kinda 'proud' of my losses; in as much as they were only ever twenty to thirty pips and always within my plan - which I've stuck to the discipline of right up to this day.

I never did revenge trading though, I decided (by approx. month two) that the most I'd ever lose on any given day was £100 when I only risked a quid a pip. Therefore three-four losing trades and I was out. I hit this barrier two or three times. It gave me so much breathing space to backtest/re-examine (both myself and the trade). Looking back it was essential to my emotional 'trading' growth.

Once you develop your system the revenge trading surely morphs? My only 'mistakes' now can be either taking the trade too early (8 times out of ten it's still a winner) or the market turning unexpectedly which none of us can account for. This tends to take out my stop early signalling a possible reverse to my original trade, allowing the loss to be immediately consigned to history...

Last edited by Black Swan; Jun 3, 2009 at 10:11pm.
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