Revenge Trading

This is a discussion on Revenge Trading within the Psychology, Risk & Money Management forums, part of the Methods category; Hi all, I have been day trading stocks for a few years now and have not been profitable up to ...

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Old Apr 4, 2010, 6:01pm   #1
 
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Joined Dec 2006
Revenge Trading

Hi all,

I have been day trading stocks for a few years now and have not been profitable up to this point. One of my biggest problems is revenge trading. One or two losses doesn't bother me but three or four in a row seems to knock me off balance, and I HAVE to try to make those losses up. I start taking trades that don't fit my system, trading with more size, and before you know it, I have a big losing day. This is so frustrating, because 95% of the time I do this, I lose money, but it's so hard to control my emotions sometimes. I usually go back to paper trading if I hit a really bad streak, I can trade decently on paper. But when I go back to real money, it all falls apart again.

I have doubts that maybe I'm just not cut out for day trading, but yet I don't want to give up, I want to overcome this. Has anyone experienced this problem, and how do you deal with it?

Thanks.
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Old Apr 4, 2010, 6:45pm   #2
Joined Dec 2007
Re: Revenge Trading

I used to be absolutely terrible at revenge trading. The best thing you can do (as soon as you feel the urge to revenge trade) is switch off the computer and go somewhere where you can't access your trading platform.

Go for a run, go down the pub, go fishing - anything

Just get away from your trading setup. Even if it's one hour into your trading day. Stop for the day and distract yourself from anything trading related.

After a night's sleep, I usually found that I was fresh, psychologically balanced and ready to go again.
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Old Apr 4, 2010, 6:59pm   #3
Joined Nov 2009
Re: Revenge Trading

I agree with P5 on this...This is a problem I have also struggled with for years.. although I have always called it anger trading.(grrrr!)
I have a 3 trade rule that normally keeps me out of trouble .. 3rd losing trade in a row and I take a break.. leave the screen and go for a long walk or something!. 3 trade rule works for me but you may need to adapt it a bit to suit your style!.. dont beat yourself up over this problem though because i think it is something everyone suffers from..I have wiped out my account several times over the years doing exactly this .. but then I have recovered by trading like a grown up instead of throwing the toys out of the pram!.
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Old Apr 4, 2010, 7:24pm   #4
Joined Apr 2010
Re: Revenge Trading

Quote:
Originally Posted by byeung7 View Post
Hi all,

I have been day trading stocks for a few years now and have not been profitable up to this point. One of my biggest problems is revenge trading. One or two losses doesn't bother me but three or four in a row seems to knock me off balance, and I HAVE to try to make those losses up. I start taking trades that don't fit my system, trading with more size, and before you know it, I have a big losing day. This is so frustrating, because 95% of the time I do this, I lose money, but it's so hard to control my emotions sometimes. I usually go back to paper trading if I hit a really bad streak, I can trade decently on paper. But when I go back to real money, it all falls apart again.

I have doubts that maybe I'm just not cut out for day trading, but yet I don't want to give up, I want to overcome this. Has anyone experienced this problem, and how do you deal with it?

Thanks.


All traders have losing trades, it's universal in the world of trading. If what you do produces profit in the long run then this is what you need to keep in mind at all times. One trade does not make a trader, successful trading is based on robust longevity of a method or strategy that puts the trader into positive territory consistently over time.

When the markets re-open, have a day off, let someone else make one trade for you on your account. If your trade parameters are set correctly it shouldn't matter to you wether or not the trade gets stopped out or makes money. The markets are here to stay.
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Old Apr 4, 2010, 10:25pm   #5
Joined Sep 2004
Re: Revenge Trading

Try asking yourself this...

"Just who am I taking revenge on?" Try and remember the market is a lot of things but one thing it truly isn't is personal.

Hope that helps.

GJ
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Old Apr 5, 2010, 9:02pm   #6
 
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Joined Dec 2006
Re: Revenge Trading

byeung7 started this thread Thanks guys, for the replies, very helpful. Nice to know I'm not the only one!
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Old Apr 13, 2010, 6:38pm   #7
 
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Joined Apr 2009
Re: Revenge Trading

Quote:
Originally Posted by GammaJammer View Post
Try asking yourself this...

"Just who am I taking revenge on?" Try and remember the market is a lot of things but one thing it truly isn't is personal.

Hope that helps.

GJ
Who is responsible for the loss? The market or the trader (why would a failed trade illicit such an emotional response - poor risk management and or over committed on position size)? Moreover, when a trader goes into revenge mode, who is likely to come off worse? Maybe something we can all think about the next time we get stung...
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Old Apr 15, 2010, 10:46pm   #8
 
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Joined Mar 2010
Re: Revenge Trading

Everyone has to go through these stages at some point man. Like Paulie said, get away from the computer. Go for a run or workout or whatever other hobby interests you. Getting your mind off of the losses will become second nature after some time and experience.
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