Risk and psychology
Revenge trading
Definition
Trading to win back a loss right away, usually with bigger size, a weaker setup or no stop. It turns one planned loss into several unplanned ones.
Example
Say a stop-out costs you the planned $200 on 200 shares, and you jump straight back in with 400 shares on a weaker setup, with no stop, to win it back. That stock drops $1.50, a $600 loss, so the day ends $800 down instead of $200. The first loss was part of the plan; the second came from trying to erase it.
Hypothetical numbers, for illustration only.
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