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Revenge trading: the pattern and the rules that stop it

How a planned loss turns into an emptied account in four steps, and the two written rules that interrupt the sequence.

The pattern

Step one: you take a loss you planned for. Fine. Step two: you immediately re-enter to get it back, bigger, with no new reason. Step three: that one loses too, and now it is personal. Step four: you trade three to five times your normal size. This is the trade that empties the account. Every trader who has blown up can point to the day this happened; most can point to the minute.

Why willpower does not work

Tilt is a physiological state, not a character flaw. Heart rate up, attention narrowed, time horizon collapsed to the next candle. In that state you cannot evaluate a rule; you can only follow one that was already written. So the rules must exist before the loss, in plain words, somewhere you will see them.

Rule one: two losses, then nothing

After two consecutive losses, no new trades for twenty-four hours. Not "unless the setup is great". The great setup that appears right after two losses is the one your tilt invented. Twenty-four hours resets the chemistry; the market will still be there.

Rule two: a daily loss limit in dollars

Set a number, about three planned losses, and when you reach it, close the platform. Not just the position: the platform. The dangerous trades happen while "just watching". If you need to keep clicking, click on a paper account; the itch usually dies in twenty minutes once nothing is at stake, and the sim journal will later show you what the extra trades would have cost.

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