When we lose something our first thought it that we have to get it back. We fight to get it back even if it’s at the expense of those who took it from us.

Now when the market takes money away from us, we are not going to let it go easily. We put up a fight and try to get it back. We think we are going to give the market a hard time, but in reality it is the market that is going to give us a hard time.

The more you fight for your money, the more your mindset changes, the more your mentality slips, the more you give back to the market. You forget about discipline and you begin to neglect and disregard the strategy – which in turn leads to you placing trades on hope. What takes a minute to lose will take, days, months and even years to get back.

So, what are the triggers for revenge trading?

Everyone is different therefore each trigger will be different. It could be not analysing properly or losing a lump sum in a single day. Whatever the case may be, here are some things you can do to help stop you from falling into the trap of revenge trading…

• Study yourself as a trader, know yourself, and use a trading diary.
• Follow the 3-strike rule: after 3 consecutive losses take a long break until you feel ready to trade again.
• Identify your root cause for your failure. Did you get it wrong or did the market get the better of you?

You have to have a steady head and a cool mind to succeed in the market. Everyone makes losses, but its how you handle it that will make you succeed.

 – Ryan Mowatt, The Performance Coach.