What If You Recover Your Losses Doing Revenge Trading?
In a normal situation, you may not do some extreme things. When you make your move in trading based on emotion, you can do some extreme things that you should not do in the first place. Is it bad if someone recovers losses doing revenge trading?
Why do some people get into revenge trading?
No one likes to go through a huge loss. When you do trading, it is normal you will lose some trades. You follow your trading strategy and plan to execute the trade. Losing some trades does not mean the system you follow is broken.
You do not control the market. The crypto market is highly volatile. Anything can happen out of nowhere. You make your move based on your trading strategy and plan.
But when you make a big loss somehow, you find it hard to accept that. Maybe you make some mistake or do not manage your risk while trading and it causes a huge loss. Now you want to recover your losses as soon as possible. It triggers revenge trading.
You usually start doing revenge trading driven by your emotion. You may not pay attention to your trading plan and strategy. You want to make a lot of profit in a short period of time.
You take a larger position in a trade that you are not supposed to do. Or, you take high leverage without paying attention to risk management. You wanted to make a lot of profit to recover your losses but end up losing more money. You start doing more revenge trading and lose way more money.
What if you recover your losses doing revenge trading?
Revenge trading is a bad trading practice. Even if you recover your losses by doing revenge trading, still, it is not good. Probably, you get away with it this time, but you may destroy your entire trading capital next time.
If you cannot accept losses in trading, that's a problem. The most profitable and skilled traders make losses. It is a part of the game. The crypto market can move in any direction, but you need to follow your trading strategy and manage your risk.
Anger and overconfidence cannot get you anywhere in trading. Be disciple and humble. Don't take action triggered by emotion. Follow your system and see how you are doing in trading.
So what do you think about revenge trading even if you recover your losses? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
