Revenge Trading

What is revenge trading?

Revenge trading is a post-loss decision pattern. Recovering the lost money becomes the purpose of the next trade, and part of the trading plan changes or is ignored.

Another trade after a loss is not automatically revenge trading. Check whether the setup, confirmation, session, sizing method or reason changed because the purpose became “make the money back.”

A fictional XAUUSD example

You take a planned XAUUSD trade during the London session after price moves beyond the Asian range and returns, followed by a confirmed breakout. The trade follows your rules and ends at −$50.

Three minutes later, price reverses. You want to enter before a fresh breakout candle closes and use a bigger size to recover the $50. The possible revenge pattern is not the second trade itself. It is the change in confirmation, size and reason.

This is a fictional teaching example, not a live setup or signal.

What should you check?

1. Setup: is there a completely new setup that meets the same written conditions?
2. Confirmation: did the required candle close or checklist finish?
3. Session: are you still inside the time window written in your plan?
4. Size: are you using the same documented sizing method?
5. Reason: would you take this exact trade if the previous result were $0?

If the new decision passes the same checks, the fact that it follows a loss does not prove revenge trading. Setup compliance can help you compare the new decision with the conditions written before entry.

Revenge trading, tilt and overtrading are different

Tilt is a broader state where frustration or pressure appears beside a process change. Overtrading is a wider move away from the written process, such as repeated entries or trading outside the planned session. Revenge trading is the narrower pattern centred on recovering a recent loss.

What happens next?

There is no universal waiting time, loss count or risk percentage that fits every trader. Follow the loss-response rule written before the session and the current rules for your exact prop-firm program and account stage.

Record the previous result, the urge you noticed, setup, confirmation, size method, reason and final decision. An emotion record adds context. A trading journal preserves the wider evidence, and a trade review compares several similar decisions without guessing the cause.

What should you do next?

Before the next entry, ask: Would I take this same setup, with the same confirmation and size, if the previous result were $0?

The revenge-trading guide gives the full post-loss workflow. Use the trading psychology guide for the wider behaviour system.