What is revenge trading and how can I avoid it?

Revenge trading usually kicks in after a trader takes a significant loss, and instead of stepping back to reassess and follow their trading strategy, they jump right back in, trying to recoup losses quickly. It's driven by emotion, particularly frustration and the desire to 'get back' at the market. Not cool, 'cause it often leads to more bad decisions and deeper losses.

To dodge the revenge trading trap, first, stick to a well-thought-out trading plan with risk management rules that keep trades within a certain percentage of your account. This way, you're less likely to go off the rails if things go south. Second, keep your emotions in check. After a loss, take a breather, reflect on what went wrong, and only re-enter trades when you're thinking clearly. Consider keeping a trading journal to track your mindset and reasons for every trade. Lastly, always remember, trading is a marathon, not a sprint, so keep your focus on long-term goals rather than immediate losses.