5 Tips to deal with revenge trading on Olymp Trade


Revenge trading on Olymp Trade

Trading is serious business. There are many factors you have to take into account. Emotions are not less important than knowledge and the right preparations. Have you ever heard about revenge trading? Have you experienced a loss because of that? Let’s discuss how you can protect yourself from it.

Revenge trading

Emotions are not good advisors in trading. It has been emphasised more than once. Revenge trading is when a trader losses and take another move without much thinking.

A money loss causes suffering. Nobody wants to suffer so the reaction is to do something to change this state. Traders want to recover from the loss here and now so they enter the next transaction hoping for quick recovery. Unfortunately, jumping into the market without much thinking and deep analysis often brings poor results. In effect, the loss can be even bigger.

financial lossThere are plenty of emotions behind revenge trading. First, there is anger and fear. We can also find shame and greed. We are all susceptible to emotions. It is not true that experienced traders do not make irrational actions.

Most of the time, when a transaction is opened in such strong emotions, it brings a loss and more negative emotions. Traders are not only afraid of losing capital but of the reactions of friends and families too. They want to have a good reputation and just be successful. But pushing the trades is not the solution.

How to deal with revenge trading

Below, I am going to present 5 useful tips on how to deal with revenge trading. They are results of the work of trading coaches and psychologists. Let’s see what they are.

Stop trading

The first piece of advice is to simply take a break. Emotions cloud your judgment and you should have a clear mind when making trading decisions. Even if it sounds difficult to do, as you want to recover from a loss fast, the best you can do is to stop trading for a day or two and get a necessary perspective.

stop trading after a significant lossSelf-evaluation

The break is a good opportunity for the next step which is self-evaluation. You should revise all the moves you have taken in order to find out what did not work. Self-awareness is very important when facing revenge trading.

self-evaluationAnalyse the market

Consider what the situation in the market was in times of your loss. Maybe there were not many chances to open a solid position because the trend was weak. Or perhaps the market was overly volatile? What was going on at that time? Make a profound analysis and it is very probable you will come up with something.

Review the strategy

Once you analyse the situation in the market it is time to evaluate your trading strategy. Check whether you follow it all the time and whether it has appropriate entry and exit criteria. Potentially you will discover some flaws in it that are possible to improve.

analyse the marketAdjust

By this time you should have some answers. Now you can implement necessary changes. Maybe there are some aspects of your strategy you should adjust. Perhaps it is the time of the day you choose for the session. Rethink and introduce changes.

Conclusion

Revenge trading can happen to everyone. It is important to acknowledge it and try to take control over it. Follow these 5 tips described in today’s article. They are developed by experienced traders and psychologists.

Stay calm and take a break. Evaluate your decision-making process, the market situation and the strategy you are using. Implement necessary adjustments and keep on trading.

Wish you good trading results!

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