Are You Revenge Trading?

Hello Mike, question-cartoon1

I have seen and read many of your posts on the site where you offer traders advice and was wondering if you can offer me some advice.

Little bit about me: I started trading 18 months with very little capital and was in a up-one-day/ down-next-day mode on my trading for over a year. Until about four to five months ago things started to click and I started to understand what types of trades I should be going after. After I started to understand I increased my portfolio 20-30x from where I started daytrading only.

The problem i started to notice is that when I start off the morning with a losing trade a loss it just goes down hill from there and I cant get back to being profitable that day. But on green mornings it’s all good I can keep making that coin$$ later throughout the day. Any ideas on what could be causing this? Would really appreciate your help.

If you have any questions for me feel free to ask.



After receiving this e-mail from an SMB Reader I felt I needed more info so I quickly responded with some questions:
  • tell me some more about your trading style
  • are you trading multiple stocks?
  • are the losses in just one stock?
  • are you trading on tilt after a loss?
  • do you have a rule for moving on from a stock after three quick losses?
  • are you revenge trading?
  • why do you think you cannot get green after one loss?
The SMB Reader responded:

Are you trading multiple stocks?
Not that often. I look for 2-3 stocks that I believe will be in play the next day and focus on that (of that group pick the best one); if they end up being duds I look for something else

Are the losses in just one stock?
From the morning trade loss, yeah

Are you trading on tilt after a loss?
What do you mean trading on a tilt?

do you have a rule for moving on from a stock after three quick losses?
No, I don’t.

Are you revenge trading?
I think so.

Why do you think you cannot get green after one loss?
I think I start thinking about how to make that back and start forcing stupid trades which digs my hole deeper I guess

*** i also have a problem with patience. Many trades that I enter I give up on or take the loss cause it’s not moving fast enough. But one to two hours later it goes to the target price that I had for it so in the end it should have been a profitable trade

Bella back here:

It sounds like this trader is revenge trading. This is a common problem for traders of all skill and experience levels. Hey, Order The PlayBooksometimes stocks just stink. The first step is recognizing that you may be revenge trading. Next, develop a rule for you to move on. For example, if after three losses you might move on to a new (better?) trading stock. You are only as good as the stocks you trade. Also keep meticulous stats on revenge trading. At our firm we are sent stats daily, weekly and monthly that monitor if we are revenge trading. One more thing: before moving on from a stock set alerts for great longs and great shorts. Though the stock may stink for many trades, if it strikes certain levels it can go from stinker to an excellent risk/reward opportunity.

I hope that helps.

You can be better tomorrow than you are today!

Mike Bellafiore

The PlayBook

One Good Trade


No relevant positions

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