Money and investing
The revenge trade in investing,money and trading.
The revenge trade.Many types of trades exist.The revenge trade is something I have personally done and are committed to stop doing doing it being a professional.
What is the revenge trade?Simple.When you are being stopped out at a loss and immediately reenter the market with the aim to win now as the market was wrong.
Well the market does not care if you are wrong,handsome or clever.The revenge trade can have 2 results.
1.The good one that I have experienced is to win now.
2.The bad one that also have experienced is to lose again.
But why is it bad?There are no smart trades,stupid trades.The revenge trade is bad as it focuses on emotions like loss aversion,regret aversion,over-confidence etc.Emotional biases are bad for investing and trading as they alter the analysis from being rational and well supported with arguments to being emotional.
If you cannot control emotions at trading or investing especially when having losses then stress and other bad things can happen.
So let revenge trades away completely or at least minimize them.