开源贡献
ericet
Revenge Trading
lhorgic
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2024-02-26 12:02:24
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Hello friends, welcome back to my blog. I trust you're keeping well. I want to also believe you got value from my last post, yeah! So today we would be looking at another topic of interest today. I just thought about sharing my thoughts with you.
Yeah! We would be considering the topic, **Revenge Trading**. Some of us might just be hearing this for the first time...I know right now, you're are like, *are you for real? Is there something called revenge trading*...smiles. yeah there is. We would be exploring shortly. Just tag along.
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Have you ever made loss in your crypto advanture and then caught yourself fighting real hard in the market to regain what was lost? Have you thrown caution in the air in a bid to win trades to cover an existing loss? Maybe you do not really know what you've done by putting up such action.
Permit me to inform you that what you did there was Revenge Trading. It just as the name implies. You know how someone can wrong you and then you want to do everything in your capacity to get back at the person who have wronged you.
Many at times we found out that doing that even makes the matter worse. If we had been a little patient and relaxed, we would have handled that situation in a more mature way.
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Simply put, Revenge Trading are those moves taken by a trader to recover his loss in the market and this they do by ignoring every signs and warnings that is directly against their trading plan an strategy, thereby exposing them to further risk of incurring more loss.
You know at this point, their focus is just on recovering their loss and they do not mind if it's daring as they are already at a desperate point. The bitter truth is that these kind of trader make irrational decisions in a bid to recover their loss.
The fact is revenge trading is a wrong trading practice as it is powered by emotional impulses. The trader's emotions at that point is unstable and his decisions after the huge loss can never be an informed one. Don't forget I said his major aim is to recover the loss any which way.
In a nutshell, huge or major losses on the path of the trader bring about revenge trading if not well managed. The fact is not every trader can handle or manage loss. Another cause of revenge trading is anger and overconfidence.
One can get angry over a loss and get back into the market to scout for trading opportunities even when it doesn't align with his trading plans. Overconfidence on the other hand can push one into revenge trading. Trader who have so much confidence in their strategy gets caught up here as they bite more than they can chew on a good day...just in a bid to recover.
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• **Learn to Accept Losses**: Losses are part of the game, when you win, rejoice and enjoy and when losses come, bear it and move on. There are happy and bad days in the market. The fact is, we do not control the market, there are time some happening in the financial realm overrides our strategy and then put us in a contrary position.
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There is always a lesson to learn from both our wins and an losses. We would save ourself a lot of headache and further loss when we learn to accept loss and learn from the loss too. This is what many traders fail to understand, hence the reason they end up revenge trading.
• **Always Stick to the Plan**: Traders who have learnt to stick with their well Informed trading plan hardly get caught up in revenge trading. Being consistent with your plans, tilting neither here nor there is already an edge over revenge trading.
Trading plan ensures you make consistent profit within certain range and when trade goes otherwise, your losses will not overwhelm you because it also within a range you can bear based on your designed trading plan.
Traders who end up revenge trading are those who seem to have deviated from their plans and might have incurred huge loss in the process.
• **Keep Journal of you Trade**: Have you seen someone diligent in his dealings, one of the way to know such person is in the way he documents his activities. Journaling your activities helps you have record of what trade you took, why such trade was taken and the result from the trade.
If you have made loss, the journal will still be a good tool to learn from the loss because it would documents the kind of trade that brought the loss and why you have that loss. Having this would help you make informed decision next time. It can even give you a pointer such as tweaking your strategy to produce better results.
• **Take a Break From Trading**: This point to many might sounds like some ineffective random advice but I tell you, it's the potent of them all at that critical time when you experience serial loss. You need to shut your self up from the noise and those seeming deceptive opportunity in market.
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Taking a break will go a long way in helping you calm your nerves, putting your body spirit and soul together and restore sanity. Once you stay active around the market even after series of losses, you would be tempted to revenge trade especially when you've not trained your mind to accept loss.
Taking a break will help you see clearly, showing you where you missed it and the help you make informed choice at your come back into the market.
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There you go friends.I would love to wrap it up at this juncture. I want to believe you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
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**Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.**
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Regards
@lhorgic♥️
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