How to Stop Revenge Trading - 6 Steps to a Profitable Mindset

How to Stop Revenge Trading - 6 Steps to a Profitable Mindset

One of my clients asked me last week... "how do I stop revenge trading?"

What is Revenge Trading?

You can’t stop trading after losing money, trying to make back a loss.
Also known as trading on tilt. Your emotions take over. You abandon your strategy, and you force the next trade which is usually a loss.

Losses hurt, and taking "revenge" on the market is attempt to alleviate that pain by getting the money back. This is very common among traders, but you can fix this bad habit with a little bit of effort, and the strategies I outline in this video.

What Causes Revenge Trading?
• Ego – I'm smarter than this market, I deserve to be successful, I should have been successful at this a long time ago. Everyone else is making money, I should too!
o Your ego is hurt – it's not about the market anymore, it's about YOU and getting what YOU want.
• Fear – are you trading with scared money? Money you can't afford to lose? This fear is causing this irrational behavior.
• Greed – you're trying to grow your account unrealistically, causing you to lash out at the market.
• Anger – you may have a problem with your attitude/personality.
o Do you have unrealistic expectations that cause you to act irrationally?
• Take it Personally – is the market out to get you? Greedy brokers? Market makers?
o losses shouldn’t be taken personally, and they definitely shouldn’t be used as a reason to keep trading just because you want to ‘win’.
• Trauma – losses cause pain, and we may have PTSD from previous painful experiences that cause us to act out in anger against anything. The market just happens to be there in front of you.

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