Revenge Trading
Trading to recover a loss rather than because a valid opportunity appeared.
Also called: revenge trade · tilt
In plain language
After a painful loss the impulse is to make it back immediately. The next trade is chosen for its speed of recovery rather than its quality.
It almost always comes with increased size, because normal size would take too long to undo the damage. That is exactly when the math turns hostile.
A single revenge sequence can produce a larger loss than weeks of ordinary losing trades combined.
Why it matters
This is the mechanism behind most account-ending days. The loss itself is rarely fatal; the reaction to it is.
Common mistakes
- Increasing position size immediately after a loss.
- Trading a setup outside the plan because it is available right now.
- Having no daily loss limit that forces a stop.
Keep exploring
These concepts are connected. Understanding one usually makes the next one easier.
A written set of rules defining what you trade, how you size it, and when you exit.
The fixed share of your account you are willing to lose on any single trade.
The decline from an account’s peak value to its lowest point before a new peak.
Taking more positions than your strategy actually justifies.
The tendency to feel losses about twice as strongly as equivalent gains.