A trader explains the revenge-trading impulse that hits after losses: the urge to make one more bet to break even. He warns that doubling down turns a bad day into catastrophic losses, and argues algorithmic trading avoids this emotional trap entirely.
I'm one of you, eh? I also have the revenge trading impulse. The only difference is that I can control it, and if I really want to try one last shot opportunity, I do it with proper risk, without doubling. But I also have negative days, negative streak, like everyone else, no? We as humans, like Tom O'Gart says, we are not designed to trade. Because think about it, when you are in a losing streak, the market is telling you, look, your strategy is not performing at the moment. Okay, because maybe you have a trend following strategy, the market is compressed, you should stop. But our mind is saying, I will not go to sleep with a red on the account. So I will take one more opportunity and then one more opportunity and then one more opportunity. And if you double the risk with martingale or stuff like this that beginners do, you end up the day with a huge loss. You will either stop trading or either think it's a scam. Okay. But if you go over it and you go over the plan and you review, you notice that when your strategy was not performing, you doubled risk and you took more execution than you should have taken. So at the end of the day, this is a psychological And on this, algo trading is superior.
