Revenge trading
Revenge trading is entering a new position primarily to recover a recent loss rather than because a valid setup exists — typically with increased size, reduced patience, and shortly after the losing trade closed.
It is identifiable by its signature rather than its intent, because traders rarely recognise it while doing it. The pattern is a loss, followed quickly by a new entry, usually larger, often in the same instrument and often against the prevailing direction.
What makes it costly is not the individual trade but the sequence. One revenge trade that loses tends to produce another, and the position size usually escalates as urgency builds. A single ordinary loss becomes the worst day in the account.
The measurable markers are time-since-last-loss, size relative to normal, and whether the entry met the trader's own documented criteria. All three are recorded automatically in a synced journal, which is why the pattern is easier to detect from data than from memory.
Related terms
Maintained by Jared Sinclair, Founder · Syrax Global FZCO · Definitions are educational, not financial advice.
Knowing the vocabulary is the easy part.
Every term here can be learned in an afternoon. Applying them consistently under pressure is the part that decides outcomes — and the part we measure.