Forex trading is very much popular in today’s world due to its lucrative potential. Traders can easily make a good amount money by trading the forex market. But in reality instead of earning money from this forex market almost 95 % of the traders are losing money. Only 5 % of the traders are making a consistent profit out of this market. This 5 % people are known as professional traders and their profit is termed as “smart earnings”.
Revenge trading is one the most common mistakes that traders make during their trading career. So, “What is revenge trading?” When a trade goes wrong and after taking the loss traders get excited and re-enter the market to recover their loss with high lot size. This type of trading after a loss is generally referred as revenge trading. “Trading is all about perseverance and consistency.” It very obvious that you will have some losing trade in your portfolio along with the winning ones. This doesn’t necessarily mean that you are not a professional trader. Managing your money and making the profit out of it, in the long run, is prime agenda of the professional trader.
Like everyone else, the most successful trader have some losing months in each and every year. So what made them so special and professional? The fact behind their professionalism and success is- “they don’t take the loss personally rather they take it as a part of business.” They stick to their trading strategy and discipline since they know their system works! A bunch of losing trade is very normal like a series of winning trade. There is no need to hurry to recover their loss once a trade is closed with the loss.
Revenge trading can be very dangerous for a “trader career.” Research shows that traders lose more money in revenge trading since there is no money management and valid trading setup involved. It’s true that revenge trading might recover your loss for one or two times but ultimately this will devastate your trading discipline and career. It’s the outcome of your emotion.
“Trading and gambling are not same at all.” It requires extensive knowledge and trading skills of the financial market. Taking a trade without justified risk is nothing but gambling in the forex market. Revenge trading is nothing but gambling with the desperate move to gain back all your losses. Trust me, once you develop this revenge trading habit all the good trading skills will get blur. So, if you truly want to be a successful trader then it’s imperative that you avoid revenge trading at any cost. There is well known saying in the forex world “Trade like a Sniper, Not like a Machine Gunner” You can miss you first shot and incur a loss that doesn’t mean you will lose your patience and throw away your discipline. Professional traders study their losing trade instead of revenge trading. They try to find the possible cause behind their loss. They always embrace the loss since mistakes are great to tools to learn which set things right in the near future.