When should I trade again after a loss?

Only once the emotion has settled and a setup that fits your plan appears. Many traders stop until the next day after hitting their daily limit.

How do I recognize revenge trading?

If a trade was opened right after a loss, at larger size than usual and without a clear setup, it is almost always revenge trading.

Risk

What is Revenge trading?

Qasos savdosi

In short

Trading bigger and without a plan right after a loss to "win it back" quickly.

Revenge trading is trading without a plan, with bigger size or risk, right after a loss to "win it back" quickly. It is reacting to your own emotions (anger, frustration, the urge to prove yourself) rather than to the market.

Signs

A new trade is opened minutes after a loss, even without a setup;
Risk per trade jumps from the usual 1% to 3–5%;
The stop gets moved or removed;
A goal appears: "I must finish the day green".

Why it's dangerous

Revenge trading turns one ordinary loss into a large drawdown. As size grows, each next loss is bigger and the emotion stronger — a spiral. On top of that, recovering from a deep loss needs a disproportionately large gain: a 20% loss requires a 25% gain.

How to prevent it

A daily loss limit: for example, 2 losing trades or 2% of the account — then no more trading that day.
The same risk percentage on every trade, including after a loss.
A mandatory break after a loss: step away from the screen, wait 30 minutes.
Tag post-loss trades separately in your journal.

One evening: daily limit vs revenge trading

A: 2 losses → −$200 limit, stoppedB: "win it back" — risk 2× after each loss

Account $10,000, normal risk $100. Both lost their first 2 trades. A hit the daily limit (−$200, i.e. −2%) and stopped. B kept doubling: $200, $400, $800 at risk — after 5 trades −$1,600 (−16%).

Example

Balance $10,000, rule: 1% risk per trade ($100).

The first trade hits its stop: −$100. Balance $9,900.
To "win it back", an unplanned trade at 3% risk ($300) — another loss: −$400 total. Balance $9,600.
In anger, 5% of $9,600 ($480) is put at risk — another loss: −$880 total. Balance $9,120.

One 1% loss became 8.8% within an hour. Getting back to $10,000 now takes a gain of $880 ÷ $9,120 ≈ 9.6%. You can check this in the drawdown recovery calculator. Following the rule, three losses would have cost about 3% in total.

Mistakes and tips

A loss is a normal part of trading; trying to win it back the same day is the most expensive mistake.
Write your daily loss limit down in advance and close the platform when you hit it.
Don't increase size on the trade after a loss — reducing it is often wiser.

Frequently asked questions

When should I trade again after a loss?: Only once the emotion has settled and a setup that fits your plan appears. Many traders stop until the next day after hitting their daily limit.
How do I recognize revenge trading?: If a trade was opened right after a loss, at larger size than usual and without a clear setup, it is almost always revenge trading.

Learn it in the Academy

This term is covered with hands-on examples and a quiz in these lessons of the interactive course.

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Related terms

FOMO Risk per trade Drawdown