Trading psychology · Lesson 27
Losses and revenge trading
A loss can create pressure to recover money before the next decision has been evaluated.
A loss can create pressure to recover money immediately, leading to larger size, lower-quality setups or rule changes. Revenge trading converts one planned loss into a sequence of unplanned decisions. A predefined daily risk limit, a pause after emotionally significant losses, and a journal that records rule violations can help separate strategy performance from emotional reactions.
Imagine the next trade is larger or less selective because of the previous result. The new decision is then shaped by the desire to recover rather than the original criteria.
Describe a historical decision without using the result of the previous trade as a reason to take it.
Next in this series: Journaling and review.
#TradingEducation #PriceAction #RiskManagement #TradingTurtle
Losses and revenge trading
A loss can create pressure to recover money before the next decision has been evaluated.
A loss can create pressure to recover money immediately, leading to larger size, lower-quality setups or rule changes. Revenge trading converts one planned loss into a sequence of unplanned decisions. A predefined daily risk limit, a pause after emotionally significant losses, and a journal that records rule violations can help separate strategy performance from emotional reactions.
Imagine the next trade is larger or less selective because of the previous result. The new decision is then shaped by the desire to recover rather than the original criteria.
Describe a historical decision without using the result of the previous trade as a reason to take it.
Next in this series: Journaling and review.
#TradingEducation #PriceAction #RiskManagement #TradingTurtle
