Revenge Trading

Revenge trading is the urge to immediately win back a loss, usually through a bigger, faster, less carefully considered trade taken right after a bad one. It replaces your normal decision-making with a single goal — undo what just happened — which tends to produce exactly the wrong moves: oversized positions meant to "make it back faster," entered without your usual setup criteria, under a completely different mental state than the one that picked the original trade. A single planned loss, well within an account's normal risk tolerance, can snowball into a much bigger one in a single session once revenge trading takes over. Many traders build in a rule for this exact moment — a mandatory pause after a loss, a cap on trades per day, or a rule against sizing up after a loss — since the goal isn't avoiding every loss, but stopping one ordinary loss from cascading into several unplanned ones.