How do you avoid revenge trading when you are experiencing drawdown? The urge to get yourself out of the hole ASAP is so big...
Stop trading until that urge goes away; then wait a few more days. It's a lot easier to lose money than to make it back.
The easy answer is to don't do it but that's not your question. Your question seems to be that you have discipline problems and you don't know how to stop from revenge trading. Regardless, if you have a valid trade signal that's within your trading plan...it's not revenge trading. Revenge trading usually is a label slapped onto trades not via the trading plan...trades based upon "it looks good" without an edge. The best way to stop is to first identify why you have discipline problems and then resolve the problems because someone that does revenge trading usually has other trading related problems due to a lack of discipline. Thus, if you don't know what's causing those discipline problems...you're not going to stop revenge trading on a consistent basis nor will you prevent any other trading related problem. Yet, if revenge trading rarely occurs and you rarely have discipline problems...I wouldn't worry about it and it's impact on your bottom line is usually minis cue assuming it rarely happens. Mark
Resist the urge to trade on impulse or the current drawdown could become much bigger. We don't trade as well when emotions take control over our reason. Good advice is to stop and readjust. Crazy A
Shut down and step away immediately. Your mind is no longer rational and you'll miss rational setups because valid setups take time to form and you're in a state of mind where you feel you must dig out of a hole now. If it was that easy to dig out of a hole AT WILL, we'd all be daily millionaires now, wouldn't we?
doj,really enjoying your posts,what a great student you are,what did you do before starting trading,your mind is a steel trap,thanks for sharing your stuff
It takes enormous amount of concentration to day trade well, we all get times of doing something wrong almost each day and if with a little bit of luck doesn't cost us anything other than breakeven, but when we get flusterred by taking a non-system trade, we have lost that concentration that is needed to trade our methods and now will only add to our current problems. It is like a snowball rolling down a hill and only gets bigger. As far as taking a nap, am usually too irratated to do that. Once I have that "urge", I know I have lost that concentration, go out back with a tennis ball and throw it against the wall till I get tired, go for a mile walk, if it was a huge error or loss-go to the movies and see action movie or comedy, then when I return, it won't feel as bad. But doing this, I see this as a good thing, ended on a good note, cause I could stay and make more errors.
Simple - concentrate only on limiting your downside risk on any and every trade, assume all trades will hit your stops and be losers immediately after entry, don't check your account balance more than once per week, and never think about how much you can make on a trade, only how much you can lose.
Wise words, but.... Easier said than done when one incorporates an average down strategy with a disaster stop that rarely gets hit Crazy A