Introduction – Revenge in the market is a fact, not an accident
You've lost three trades in a row. Your balance has dropped by 5%, and you're sitting there staring at the screen, feeling like "I have to make up for this now." One thought lingers in your mind: get into something, anything, to make a quick buck.
This is what is called revenge trading – emotional, impulsive trades just to “prove to the market” or to yourself that you know what you are doing.
And this is the road to disaster.
Research in the field of trading psychology clearly shows that after a series of losses, a trader makes on average 40% more irrational decisions because they want to "recover quickly.".
In this article, I'll show you how to get back into the game without revenge, that is, with a clear head and a plan – instead of panicking.
1. Understand the psychology of loss – it is not a personal failure
Before you start to “fight,” you need to know what is actually happening in your brain after a series of losses.
Loss hurts. And it hurts much more than a gain of the same size pleases. Neuroscientists talk about loss aversion – a discovery by psychologists Kahneman and Tversky: a loss of 100 złoty hurts twice as much as a gain of 100 złoty pleases.
This causes your brain to:
- goes into "recovery" mode - everything else disappears, you just want to go back to the previous state,
- ignores logic – instead of waiting for a good setup, you take the first one that comes along,
- you increase the risk – you think “if I enter a larger position now, I will bounce back faster”
- does not accept loss – “until I close the transaction in the green, I will not lose” (even though you have already lost, you just do not realize it).
This isn't weakness. It's the brain's natural response to perceived threat. But if you don't know this, you're making exactly what the market is expecting—emotional, foolish decisions.
2. First step: STOP – a break, not desperation
After a series of losses, the smartest thing you can do is stop trading for at least a few dozen minutes. Better: the rest of the day. Ideally: until the next day.
Research on emotional decision-making in finance shows that a 30-60-minute break reduces the risk of irrational decisions by 50%. It simply gives the body time to reduce cortisol and adrenaline levels.
A simple protocol that works:
After 2-3 losses in a row in one day:
- You close the platform.
- You're not looking at new setups.
- You do something else – a walk, coffee, exercise, whatever.
This isn't cowardice or "giving up." This is professional mental hygiene.
Every serious trader has set limits:
- maximum number of losses per day,
- maximum % of capital to lose per day,
- and then – end of session. No discussion.
3. What not to do after a series of losses
There are a few things that almost all beginners do – and they guarantee even bigger losses.
Don't throw away the whole system
After 3-5 losses, you think, "This strategy isn't working, I'll try a new one."
This is one of the biggest mistakes.
Research shows that traders who change their strategy after a few losses lose 70% more often in the long term than those who stick with the tested system.
Why? Because losing streaks are a normal part of the game. Even systems with a 60% win rate have periods of 3-5 losses in a row. It's a statistic, not a disaster.
The question you should ask yourself:
- “Did I lose because the strategy was bad or because I broke its rules?”
80% of cases are the latter.
Don't increase your position "because I have to recover"
It's a surefire path to bankruptcy. After a series of losses, your ability to assess risk is paralyzed. Your brain says, "larger position = faster return.".
Meanwhile, a larger position in this state = a larger loss in 80% of cases.
Don't ignore what happened
Some traders, after a series of losses, simply return to the game without analyzing anything.
This is also a mistake. Every loss is information if you analyze it.
4. Analysis instead of self-accusation
After a break (at least a few hours, but ideally a day later), you sit down with a notebook and look at each losing trade.
Questions you ask yourself:
- Did each trade align with my entry plan?
- Where did I see a real signal and where did I play by feel?
- Was the loss caused by strategy or my execution (entering too early, too late, breaking from the plan)?
- What percentage of transactions in this series followed my rules?
Trading psychology research shows that consciously analyzing losses – without self-blame – reduces the risk of revenge trading and builds real resilience.
If, after analyzing, you discover that most of your losses are due to your breaking the rules, not to a flaw in your strategy, that's good news. You know what to work on.
5. Reset It: 3 Things You Need to Change After a Series of Losses
Reduce item size
After a series of losses, do not return to a full position.
If you normally risk 2% per trade, after a series of losses, lower that to 0.5–1%.
Why? Because:
- reduces emotional pressure (less money = less stress),
- allows you to return to rational thinking before returning to “normal” risk,
- builds your confidence through a series of correctly played trades, even if they are losing ones.
Focus on one simple setup
After a series of losses, don't grab everything that moves.
Choose one setup you know best and play only that.
Goal: a few trades played 100% as planned, not a quick return to the previous balance.
Set a hard limit for the day
After a series of losses:
- maximum 4 transactions per day (instead of 10),
- maximum 2 losses per day (if the second one – end),
- maximum -1% loss per day – then you close the platform.
These limits are psychological protection. Without them, the risks of revenge trading increase.
6. Getting Back in the Game – The Path to Mental Recovery
After taking a break, analyzing and setting new limits, you will return to the market, but differently.
First week after a series of losses:
- You set a goal for yourself: “play 5-10 trades 100% according to plan.”.
- The financial result (profit/loss) is of secondary importance.
- Focus on the procedure, not the result.
Why does it work? Because:
- you rebuild your confidence in yourself – if you play 10 trades correctly, your brain knows that you can play,
- you reduce the feeling of failure – even if transactions fail, you know that the procedure was correct,
- you block revenge trading – you have limits, so emotions can't take over.
7. Reality: A losing streak is a test, not a judgment
A losing streak does not mean you are unfit to trade.
This means that:
- you have found the point where emotions speak through you,
- you have a chance to learn (if you analyze),
- you are close to a breakthrough point – Those who learn from a series of losses later make enormous progress.
History: Many professional traders say that their first losing streak was their best teacher. After that, they knew what not to do.
Summary – Road to Revenge
After a losing streak, you have two options:
Route 1: Revenge trading
- You enter on emotions, with a larger position, into random setups.
- The market is looking at this and will move you in the wrong direction.
- The loss is growing.
- Another series of losses, this time bigger.
- Boom – account empty.
Route 2: Scheduled Return
- You stop.
- You analyze.
- You set new limits.
- You come back into the game slowly, with smaller positions, on one setup.
- You rebuild trust.
- After a few days you'll be back to normal play - but much smarter
Research shows that traders who use Route 2 make on average 5 times more money over the long term than those who indulge in revenge trading.
The choice is yours.
After a losing streak, a trader is most often faced with a test of character: will he trade with his head or with his emotions?.
Share in the comments: How do you cope after losses? What helps you return to a calmer game instead of seeking revenge on the market?
