Glossary
Revenge trading
What is revenge trading?
Revenge trading is the pattern of taking impulsive trades after a loss to quickly recover money, status, or a sense of control. It usually feels rational in the moment, but it tends to produce oversized positions, lower-quality setups, and repeated rule-breaking.
Example
You take a stop-out, feel the heat rise, and re-enter within minutes, bigger this time, on a setup you would normally skip. The goal is no longer the trade. It is to undo the last one.
Why it matters
Most account damage is not one bad trade. It is the three trades that chase it. Revenge trading is where a manageable loss turns into a drawdown.
Common signs
- The next trade is sized to win back the last loss, not to its own plan
- You re-enter within minutes of a stop-out
- The setup is one you would normally pass on
- You feel you need to be right now, not over the next hundred trades