Understanding psychology of revenge trading

foroom lluzers

Veteren member
3,611 135
Traders try to preserve or restore their real account balances , after losing money with a string of losses , with larger position sizes .This is how our minds are built and our ancestral brain carries out this process of overexposure , to recover losses.It is also influenced by loss aversion thinking , because nobody likes to lose .

When traders sit in front of screens ,their mindset and emotions are set for wining , traders will try to play the winning game , at any cost because of an emotional hijack.The desire to win drives them to stake higher positions to recover the losses.

This IS NOTHING NEW WITH GAMBLERS , it is in our mindset to win , it happened several thousand years ago in Mahabharata.Here in this scene from the
Mahabharata , the man gambles every asset including his brothers and wife , in a roll of dice because he believes he knows he will win on the next roll of dice .

If you go to play football , you will try to win at any cost , trading is about winning money.

Screen based traders are at risk to revenge trading ,it can be reduced with SET AND FORGET STRATEGIES , that don't require traders to sit in fron of screens.Traders should eventually feel comfortable with their trading strategy because a mismatch with your trading psychology, can motivate revenge trading.Revenge Trading is the leading cause of Trader Failure. Revenge trades are emotional trades that’s done for the wrong reasons. Your emotions have so overcome your normal rational decision making process.



https://en.wikipedia.org/wiki/Mahabharata




http://www.dailymotion.com/video/x2lnm0x_understanding-emotional-intelligence-the-amygdala-hijack_school
 

foroom lluzers

Veteren member
3,611 135
This is a delusion for traders to have the need for multiple monitors/screens , this is why many traders lose , with multiple screen based multiple losses .This the set up for revenge trades to be triggered.

If two or three trades go into losses , the need to be loss averse increases , hence the trigger for revenge trades to start.

In economics and decision theory, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains. Some studies have suggested that losses are twice as powerful, psychologically, as gains.
 

Attachments

piphoe

Legendary member
10,038 194
This is a delusion for traders to have the need for multiple monitors/screens , this is why many traders lose , with multiple screen based multiple losses .This the set up for revenge trades to be triggered.

If two or three trades go into losses , the need to be loss averse increases , hence the trigger for revenge trades to start.

In economics and decision theory, loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains. Some studies have suggested that losses are twice as powerful, psychologically, as gains.
this is bs. need screens to see what is happening elsewhere

12 is about right properly configured.
 

piphoe

Legendary member
10,038 194
Dummy with one brain needs to process 12 trades at same time.HEADING FOR FAILURE
the markets are interconnected dude, you don't know this :innocent:

there is no trade in one market that doesn't affect another.

a butterfly flapping its wings in China affect the weather in the UK(y)

you need 12 screens or so to see what ELSE is happening:rolleyes:
 

foroom lluzers

Veteren member
3,611 135
the markets are interconnected dude, you don't know this :innocent:

there is no trade in one market that doesn't affect another.

a butterfly flapping its wings in China affect the weather in the UK(y)

you need 12 screens or so to see what ELSE is happening:rolleyes:
12 amygdala hijacks in one go?
 

foroom lluzers

Veteren member
3,611 135
Nick Leeson suffered monumental losses as the market continued its descent, Barings even further into the red. As an inexperienced trader, Leeson frantically purchased even more Nikkei futures contracts in hopes of winning back the money that he had already lost.
 

Attachments

foroom lluzers

Veteren member
3,611 135

piphoe

Legendary member
10,038 194
i'm an atheist fl, a secular humanist but thanks anyway

i believe in REASON & rationality, and a part time nihilist but i don't go overboard :D

when you are dead you are dead
 
Last edited:

foroom lluzers

Veteren member
3,611 135
Trading books new traders should not read

https://www.amazon.co.uk/Reminiscences-Stock-Operator-Wiley-Trading/dp/1592801943

https://en.wikipedia.org/wiki/Jesse_Lauriston_Livermore

The evidence is all there , that he was a gambler , not a trader .He went bankrupt several times and lost everything he made .He was trading with borrowed money ,that is leverage ,and got into debts.He must have been a good revenge trader.

95% of traders lose , this evidence is available on google search.

He is worshiped on the internet and forums
 

AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock