Trading Psychology

Revenge Trading

Impulsively taking larger or riskier trades specifically to recover a recent loss quickly — often compounding the original loss rather than recovering it.

Revenge trading refers to making impulsive, larger, or riskier trades specifically to “win back” a recent loss quickly, often driven by frustration and loss aversion. It’s one of the most damaging psychological patterns in trading, frequently compounding losses rather than recovering them.

See how revenge trading connects to loss aversion and fear/greed patterns in Trading Psychology 101: Fear, Greed, and Discipline.