Revenge trading, the mechanism of destruction:
Every passing minute is expanding the scope of Forex trading. Revenge trading is one of the emerging terms of Forex trading. Forex trading is introducing new and new terms and different aspects of trade with the passage of time. The exciting and thrilling of profit and loss has launched this term of ‘Revenge trade’. It is a common reaction of traders after losing their money.
When you earn money just by sitting at home with a laptop, obviously you feel overjoyed. Alternatively when you lose a lot of your money in a single trade with just a few clicks then obviously you lose your temper. Such a situation makes you to make irrational decisions and trade irresponsibly to recover that loss. Then you risk too much and try to play a bigger game. You try to convince yourself by saying that greater risk leads to greater gains. Such a trade is termed as revenge trade.
Fear and frustration are the stimulus and foundation of revenge trading. Both of these emotions cloud your judgment. As a result, you intentionally throw your principles and selected strategy. You focus all your attention to any possible trick that can help to recover the already done loss. Thus the planned strategy losses its attraction and you make random decisions. It is just like taking revenge from yourself. But you need to remember that you must not trade under the influence of flow of extreme emotions. It is a major and drastic difference between gambling and Forex trading.
You need to remind yourself that loss is a part and parcel of Forex trading. Therefore you must be mentally prepared for it even before you start trading. Indulging in revenge trading is not going to benefit you. You should not lose your temper and try to deal with it patiently. It is the only way to avoid more loss in Forex trading.