What is Revenge Trading?
It is the trade where a trader decides to make up for the lost previous deal. When a funded trader encounters a frustrating loss in a specific trade, and they decide to make another aggressive trade is known as revenge trading.
Trading based on luck and emotions is gambling and not trading at all. No risk management plan will be used as you buy and sell in such a trade, and it could drain your account tremendously.
Why is Revenge Trading Detrimental?
Losing money via this type of trading will get you into more problems. Here are the reasons why you should refrain from engaging in this kind of trade.
Your trading is based on emotions rather than strategy and logic. There is no way this will work; in fact, you will end up losing even more money. Forex funding could only be the last option as you input more money in the account.
Your brain will not engage in any risk management techniques. You will only think of how to recover your lost money in the predecessor trades.
Keep in mind that revenge trading will only bring about an awful day rather than a successful day. So how do you cope with such situations and avoid revenge trading?
How to Vanquish Revenge Trading
There is some good news on how you can overcome the effects of revenge trading and do away with it altogether. Follow the following steps and save your hard-earned money.
The best option is leaving the trading room. Just go somewhere else and do something more constructive or relax. Staring at a screen that shows you how much money you have lost due to your emotions will only make things worse.
You could clear out your head by calling a friend and maybe taking walks outside. Step out of the situation and manage your emotions by doing these things.
The top traders will always focus on feedback and data from the trades they made, whether losses or wins. Make sure you note down what happened. Knowing your mistakes from the previous trade will assist you in making informed decisions on the next deal.
Trust in your system
In case you have a tested system, then you got to believe in it. Even if you incur any losses, you are still sure that the odds will be on your side. Your forex funding should not be in vain. Make sure you follow the above strategies to avoid losing your money.