Had to take a loss on your trade and now you want to get even with Mr. Market? We’ve all been there. Read this guide to learn how to deal with revenge trading.

Key Takeaways:

  • Revenge trading is a common pattern many traders take to cope with a trading loss
  • Strategies to tackle revenge trading include sticking to a trading plan and learning from mistakes
  • As a trader, strive to avoid chasing losses and trading on impulse without managing risk. 

In the market often you may be faced with a difficult decision — should you cut your losses or let them run in the hope of turning them into winners? It’s even more difficult when you choose to jump ship and then see the asset you just abandoned go your way. But you’re not onboard.  

At this point FOMO (Fear of Missing Out) kicks in and it leads to so-called revenge trading. In this article, we talk about the dangerous stunt of revenge trading, how to cope with a losing position, and how to avoid chasing the market to get even with it. 

What Is Revenge Trading? 

Revenge trading is the act of trying to “get back” at the market after taking a loss on a trade. It’s like a gambler trying to reel out of a slump, hoping to win back what was lost through impulsive and often reckless trades. For instance, imagine a trader who suffers a significant loss and then immediately places a series of high-risk trades to make up for it, only to compound losses even more. 

The Emotional Component 

At the center of revenge trading lies a powerful emotional concoction. Traders may experience feelings of frustration, disappointment, or even anger and pride when a trade doesn’t go their way. These emotions can cloud judgment and lead to irrational decision-making. 

For example, a trader may become so fixated on paring back their losses that they ignore their trading plan and nosedive into unnecessary risks. This, in turn, can lead to even more losses as the trader spirals into lax controls and the desire to make “a quick buck.” 

Ways to Combat Revenge Trading 

Let’s dive straight into some ways you can avoid revenge trading and keep your Funded Challenge account alive for longer, until you pass it. 

1. Take a Step Back

Whenever you face a losing trade (and if you haven’t — you will eventually, that’s the hard truth), it’s crucial to take a step back and assess the situation calmly. Avoid the temptation to immediately rush straight into the market to “make things right.” Instead, give yourself some breathing room to reflect on what went wrong and how you can avoid similar mistakes in the future. 

2. Stick to Your Trading Plan

A well-defined trading plan acts as a roadmap, guiding you through the ups and downs of the market. Make sure to stick to your plan, especially when emotions are running high. This means setting clear entry and exit points (take profit and stop loss orders), as well as implementing risk management strategies to protect your capital. For instance, if your plan says that you should only risk 2% of your capital on any given trade, resist the urge to deviate from this rule, no matter how tempting it may be or how strong your conviction could be. 

🔥 Top tip: Check out our Dynamic Risk Management for Prop Traders framework article, you won’t regret it! 

3. Learn from Your Mistakes

Every loss is an opportunity to learn and grow as a trader. And as much as we want to learn from other people’s mistakes, we’re human enough to make them on our own. Instead of dwelling on past failures, use them as learning experiences to improve your strategy. 

Keep a trading journal to track your trades and emotions and review it regularly to identify patterns and areas for improvement. By learning from your mistakes, you can become a more disciplined and successful trader over time. 

4. Surround Yourself with Supportive Traders

Trading can be a lonely endeavor, especially when you’re dealing with the emotional highs and lows of the market. Surround yourself with supportive traders who understand what you’re going through and can offer guidance and encouragement when needed. 

Whether it’s joining a trading community online or connecting with fellow traders in person, having a support network can make all the difference in staying disciplined and avoiding revenge trading.

🔥 Top tip: FunderPro has a very lively Discord community, where traders love to help each other. There are quite a few funded traders there that are ready to give you advice when you need it! Join here: https://discord.gg/2SF4SrWnnm 

How to Recognize the Signs of Revenge Trading

  • Impulsive Trading: Making snap decisions without proper analysis or consideration of risk.
  • Chasing Losses: Trying to recoup losses by taking increasingly risky trades. Check out our guide on combating overtrading for help with this.
  • Ignoring Risk Management: Failing to adhere to predetermined risk parameters, such as position size or stop-loss levels.
  • Emotional Distress: Feeling overwhelmed by emotions like fear, frustration, or anger while trading. 

If you find yourself doing any (or several) of the above, maybe it’s time to take a step back. Remember that you have unlimited time to complete your FunderPro Funded Account Challenge, so take advantage of that. 


Revenge trading is a temptation that can derail even the most experienced traders. Understand how to properly tackle the dangerous game of revenge trading, and you’ll build yourself into a better trader.  

At the end of the day, trading is as much a mental game as it is a numbers game. By staying disciplined and keeping your emotions in check, you can navigate the twists and turns of the market with confidence and consistency.

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