Let’s be honest: nothing stings quite like a bad trade.
You followed your setup. You thought the chart looked perfect. You clicked buy with confidence… and minutes later, it collapsed. You’re down money. You’re mad at the market. You’re mad at yourself. And then, almost without thinking, you jump into another trade—trying to get it all back.
That, my friend, is revenge trading.
I’ve been there—more times than I’d like to admit. It took a while, and a few painful lessons, but I finally learned how to avoid revenge trading after a loss. And if you’re stuck in that frustrating loop, I want to share exactly how I broke the cycle (so you can too).
What Is Revenge Trading?
Revenge trading is when you make a new trade—usually impulsively—just to try and recover money you just lost. It’s not based on a setup or a well-thought-out plan. It’s based on emotion.
Here’s what it looks like:
- You take a loss on a trade
- You feel frustrated, angry, or embarrassed
- You immediately open another trade, usually with bigger size
- That trade goes badly too, and the losses stack up
- You spiral, chasing one bad trade after another
- This cycle can wipe out days, weeks, or even months of gains in just a few hours.
- I know. Because it happened to me.
The Day I Hit Rock Bottom
One of my worst trading days ever started with what should’ve been a small, manageable loss.
I had a decent setup, but the market shifted. I got stopped out and lost about 2% of my account. Not a huge deal… but I was irritated. I should’ve walked away. Instead, I went hunting for another trade—determined to make it back.
I forced a trade on a stock I didn’t normally trade, with no clear setup. I sized up. It went south—fast. I took another big hit. Now I was angry and doubled down on another trade to get it all back.
By the end of the day, I was down 9%—in one session.
That’s when I realized: my biggest enemy wasn’t the market. It was me.
Why Revenge Trading Happens
To stop it, I had to understand why I was doing it in the first place. Here’s what I figured out.
1. I Was Tying My Identity to My Wins and Losses
I felt like a failure every time I took a loss. So I chased wins to prove I was “good” at trading.
2. I Was Letting Emotions Override Logic
Anger, frustration, and even embarrassment were clouding my judgment. I wasn’t trading my plan—I was reacting.
3. I Thought I Could Outrun the Market
I believed I could “outsmart” the market and earn back what I’d lost if I just tried harder. Spoiler: that rarely works.
How I Finally Stopped Revenge Trading
Here’s the part you’ve been waiting for. These are the real, actionable steps I took to break the revenge trading habit—and how you can start doing the same.
Step 1: I Made a Walk Away Rule
This was a game-changer. I created a rule that I still follow:
- After any losing trade, I take a mandatory 20-minute break.
- I close my charts, step away from the desk, go for a walk, make a coffee—whatever it takes to reset.
- That pause gives me just enough time to cool down, breathe, and stop myself from making an emotional decision. It’s like a circuit breaker for my brain.
- If you’re wondering how to avoid revenge trading after a loss, this is a great place to start.
Step 2: I Set a Daily Loss Limit
- If I hit a certain amount of losses in one day—either in percentage or dollars—I stop trading for the day. No exceptions.
- My rule: If I’m down 3% or more on the day, I’m done.
- This limit protects my account—and my sanity. It forces me to respect my capital and not spiral into bad trades.
- You can choose whatever number makes sense for your account, but having that boundary in place is essential.
Step 3: I Journaled My Emotions (Not Just My Trades)
I started keeping a detailed journal—not just of my trades, but how I felt during and after each one.
For every loss, I’d write:
What was the setup?
Why did I enter the trade?
How did I feel when it went against me?
Did I follow my rules or react emotionally?
After a few weeks, a pattern emerged: Every time I revenge traded, I felt anxious, angry, and rushed. Just seeing those patterns on paper made me way more aware of how often I was trading on tilt.
Now, I review that journal before I start each trading day. It keeps me grounded and reminds me of the cost of emotional trading.
Step 4: I Shifted My Mindset Around Losses
- This one took the longest, but it made the biggest difference.
- I used to see losses as personal failures. Now, I see them as part of the business. Like overhead.
- Every trader loses. Even the best. A good trader isn’t someone who never loses—it’s someone who manages losses and doesn’t let them wreck their process.
- When I reframed losses as just another trade expense, I felt less emotionally attached—and more disciplined.
Step 5: I Celebrated Rule-Following Over Wins
- This might sound weird, but I started giving myself a mental pat on the back when I followed my rules, even if the trade lost.
- If I stuck to my stop-loss, sized correctly, and didn’t chase anything—that was a win, regardless of the P&L.
- This mindset helped reinforce discipline over dopamine. And over time, the results followed.
Tools That Helped Reinforce Discipline
Here are a few simple things I use every day to stay on track:
Trade Journal (Google Sheets)
I track my entries, exits, reasoning, outcome, and emotions. Super basic—but super effective.
Timer App (Pomodoro-style)
After a losing trade, I literally set a timer for 20 minutes to force a cooldown period.
Sticky Notes on My Monitor
I wrote reminders like You don’t need to make it back today or Trade the setup, not the emotion and stuck them on my screen.
Final Thoughts: Revenge Trading Is a Habit You Can Break
Revenge trading feels good in the moment. You think you’re being proactive. You think you’re taking control.
But in reality, you’re giving up control—to your emotions.
If you’re wondering how to avoid revenge trading after a loss, here’s a quick recap:
- Take a break immediately after a loss
- Set a daily loss limit and stick to it
- Journal your emotions to catch patterns
- Reframe losses as normal business expenses
- Celebrate rule-following, not just green trades
- Trading success isn’t about being right all the time. It’s about staying in the game long enough to let your edge play out—and emotional discipline is what makes that possible.
- I’m still a work in progress, but I can say this with confidence: the moment I stopped chasing losses was the moment I started becoming a real trader.
Next Article To Read: From Gambler to Investor — My Biggest Mindset Shift