If a trader loses money in Forex, his ego says to trade in multiple actions. And the ego manipulates you to trade over one after another. The tendency of revenge trading brings you more losses constantly. We bet these words sound very familiar because you may have suffered from this. It is the instinct of humans that drives them into this damage.
If revenge trading traps an investor, one may think at the first stage that he will punish the industry that took money from him. But ultimately, the punishment comes to him and presents a bunch of regrets. Remember one thing, it will take One minute or hour to lose the assets, but One month or year will pass to rebuild it. So, take the steps very carefully.
Find the Trigger point.
Identify the trigger point of revenge trading so that it becomes easy for you to avoid such problems. The suggestion will be to quit the market when the number of wasting trades touches the borderline. If you consider yourself a scalper or day trader, leave the Forex for that particular time. In the case of position or swing traders, it would help if they take a break for some days.
Identify the actual cause of failure
One may think of why his actions are going to fail. If one can find the reason, it will be easy to avoid revenge trading. A trader asks the following question in order to find the answer.
- Did you choose the wrong type?
- Have you lost the focus?
- Did you fall into greed?
If the answer is yes to any of this question, you know the key reason for revenge trading. Solve this problem and try to trade the market like the top traders at Saxo Bank. Follow a strategic approach and you will become good at trading.
Accept the Loss
Revenge can never bring any good results because it forces the mind to be more aggressive than before. After having the experience of frustrating losses, psychology pushes to trade more. And, for the time being, it throws the strategy and game plan out of the brain. The ultimate results are known to all. Depression, regret, and anger will surround a trader. If the loss moment is trying to drive you in revenge, step out from the Forex and delete the activities related to trades. Once you have understood that no stress is in mind, return to the market. It is essential to acknowledge that loss is part and parcel of the game.
Trust the Process
Be Faithful to the system. Never think that the Forex has gone against you. If you are confident in strategy and analysis, you will be sure that though some loss was added to the account, the day’s ending would be in favor. Keep in mind that even the most successful investors see the image of failure. It’s the foreign exchange, after all.
Once you are used to the risk management system, the business will seem easier to you than before. Using a standard protocol of stop-loss, target profit increases the opportunities of earning. An investor should strictly maintain the time frame according to his perception.
Sharing with Professional
Take help from a professional who has gone through the same situation. Ask them how to focus on analytical actions instead of involving in this heck. Make yourself accountable to someone whom you may call master. Besides journal, it would help to be sensible of particular actions. Accept a risk-free demo account at the beginning. It can reduce the risk of valuable money.
Considering the aspects of revenge trading, it is obligatory to prevent this. The recommendation is to spend more time analyzing the market. Be noticeable about the incidents that are occurring in the Forex. Characterize them to treat completely. A particular currency can create volatility in Forex. Be aware of every judgment before executing the plan.
If anybody asks why we do payback actions, the answer will be “Arrogance.” Being unable to accept failure is a natural human behavior. But a merchant must need to acknowledge the loss in Forex because this is a business place. Just because of human nature, nobody will agree to ruin their own money.