Risks of Revenge Trading in Forex

Suffering losses is the part of trading as winning trades. Sadly many traders take it personal losses and by taking revenge trades they end up responding to their losses. Many market traders can’t take defeat, which eventually pushes many fx traders to revenge. Often they can take 1 or 2 consecutive losing trades, but they get angry when they lose too many times in a row and seek to win back all of those losses trades in one trade.

Revenge Forex trading is driven primarily by fear of doing wrong. It’s normally when a trader wants to make up for it by being more aggressive in his next trades, coming from a especially disappointing loss. This is bad for your account for some reasons. It forces you to lose your trading discipline out the trading. For fewer thought out trades, it moves the attention from your trading process and good risk management to trying to make enough money to recover your losses.

Financial Market Traders have a feeling of having revenge on the market when they are experiencing a losing trades that they are confident they will sort out. The main thing here is that trading is not a sure thing. Often, if you’ve lost too much money on some trades, and you end up losing that money, there’s a fair chance you’re going to want to try to rush back to the market to make that money back, which typically just leads to another loss and sometimes even bigger because you’re only emotionally retrading.

When you lose a significant portion of your equity in one or two trades, this places you in a position where you can quickly overpower your emotions. This is when you’re beginning to make rash choices and losing a grip on yourself and your account. When traders are very angry, revenge trading can be basically automatic. Forex Traders who lose tiny bits of their account on each trade are far less likely to succumb to the revenge trade.

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