We all heard about revenge trading and even by knowing the disadvantages of it sometimes we get in the trap and trade with negative emotions. Revenge trading comes from one thing only, blaming the market for your loss. But let’s think who is responsible of loss? The obvious answer is “YOU”.
The market is never responsible for your loss so getting mad at the market and trying to seek revenge really doesn’t make sense. Trading is all about taking responsibility.
In the emotion of revenge trading sometimes you get crazy at the market and try to get your losses back in an emotional way instead of a rational and logical way and in this way, you are viewing the markets through your emotional filters and not are the best state to be trading mind.in this way you will make more trading mistakes.
For example: Let’s say you lose 45 pips in the last trade. Will 30 pips profit be enough in the next trade? The market may be clearly telling an objective observer that’s all there is in this trade (30 pips) in next trade. But to the person who just lost 45 pips, 45 pips is what they will see in the markets, the trade rallies 30 pips they hold on for a hope of bigger gain and it reverses ending up 30 pip loss, adding to the earlier 45 pip loss. This is a revenge trading mindset.
but ask yourself. Does one trade really have anything to do with the other? The market doesn’t know or care how much you made or lost in the previous trade. It has no bearing whatsoever on your next trade or your next 100 trades. One trade has nothing to do with the next trade. They are not related in any way, other than in your own mind, you can only profit from what is available in front of you. And again, the opportunity or lack of has nothing to do with your last trade or last 10 trades.
I am sure many of us have read mark douglas books in which he clearly says: “You don’t need to know what’s going to happen next to make money. Anything can happen. Every moment is unique, meaning every edge and outcome is truly a unique experience. The trade either works or it doesn’t.”
It is difficult to avoid revenge trading but by practice you can overcome this emotion. you just should try to accept the loss and not let your judgement in the future be clouded by your ego. you should focus your efforts and energy on analyzing what went wrong and figuring out what you can do to improve your subsequent trades.
Trading is all about emotions and always trade with less leverage and with proper discipline.As I always repeat in my all post that it’s ok to lose the some of the opportunity rather than losing too much off money, particularly in FX business the trade will come again next day but it’s hard to make the money back because of too much emotions and psychology involved in this business.
Good Luck with you trading and investing!
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Editors’ Picks
EUR/USD hits two-day highs near 1.1820
EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.
GBP/USD reclaims 1.3600 and above
GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.
USD/JPY drops back below 157.00, as focus shifts to Japan snap election
USD/JPY is back in the red below 157.00 in the Asian session on Friday. The Japanese Yen recovers ground against the US Dollar amid some profit-taking ahead of Japan's snap general election on Sunday. The preliminary reading of the Michigan Consumer Sentiment Index report for February will be released later on Friday.
Editors’ Picks
EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates Premium
The EUR/USD pair lost additional ground in the first week of February, settling at around 1.1820. The reversal lost momentum after the pair peaked at 1.2082 in January, its highest since mid-2021.
Gold: Volatility persists in commodity space Premium
After losing more than 8% to end the previous week, Gold (XAU/USD) remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000.
GBP/USD: Pound Sterling tests key support ahead of a big week Premium
The Pound Sterling (GBP) changed course against the US Dollar (USD), with GBP/USD giving up nearly 200 pips in a dramatic correction.
Bitcoin: The worst may be behind us
Bitcoin (BTC) price recovers slightly, trading at $65,000 at the time of writing on Friday, after reaching a low of $60,000 during the early Asian trading session. The Crypto King remained under pressure so far this week, posting three consecutive weeks of losses exceeding 30%.
Three scenarios for Japanese Yen ahead of snap election Premium
The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.
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