EMOTION - REVENGE

Revenge trading is one of the quickest ways to blow your trading account.

I’m sure you’ve experienced that feeling when you lose a trade for whatever reason, and you think “damn…..right I need to make that money back!”. You need to stop right there.

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Go and make yourself a drink or go on a walk and clear your head. Then come back to your charts with a peaceful, winning, positive mindset.

It’s a common mistake amongst traders to then go hunting for more opportunities and want to jump right back into the market, even if there’s not a clear opportunity. Your judgment is clouded by the fact that you just lost some money and you want to make it back, often disregarding your trading rules and plan.

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Again, like trading with fear, you need to accept that losses are part of this game. If you have a loss, just review your work to see if there’s anything you can improve on. Document the loss, pick yourself up and carry on.

 

 

 

It’s crucial that you review your work, it allows you to understand exactly where you may be going wrong but also gives you that, “cooling off period”, preventing you from making silly irrational quick decisions that could lead to another silly loss. Before you know it, you have had 4 bad trades which you shouldn’t have even been in, instead of one loss which you reviewed, had a break and moved on to find the next opportunity.

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Breaks and walks are key to keeping yourself in a great winning mindset so make sure you stay positive, walk your dog or go for a drink after your loss to prevent yourself from wanting to jump straight back in the market.

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You need to accept that anything can happen in the Forex market at any time and anyone who says that they know what’s going to happen is lying. When you accept that, you will deal with your losses in a much more productive manner. It’s natural to feel annoyed/fed up and want revenge but in this market place all that will lead to is more losses and more problems.