April has gone..
Wow.. Duh..!? ..really? ... or still not!?
Briefly a month ago or so, we have examined at our wonderful PandorraResearch Team what is 'Revenge Trading', watch our recent 'Educational' idea right here (if you missed one), to learn what sort of lessons we should know about it.
Indeed, it was a really bad story, to purchase in late March 2025 most-hyped so-known Mag Seven stock that came flagships of the recent stock market collapse.
First of all, watch how it's been below (late March 2025) 👇👇
What's happened next just in a week or two since our publications has been made?
⚒ Russell 2000 Index
RUT 95% stocks were: DOWN
⚒ S&P500 Index
SPX 96% stocks were: DOWN
⚒ Nasdaq-100
NDX as well as Dow Jones Industrial Averages DJIA indices: 97% stocks were DOWN
⚒ Magnificent Seven: ALL STOCKS WERE DOWN
Since Nasdaq-100 went back to pre-pain 20'000 Level, lets repeat some lessons.
Revenge trading is DANGEROUS AND HARMFUL pracrice where traders, after suffering a loss, attempt to immediately recoup their losses by making impulsive, emotionally-driven trades. This behavior is widely recognized as one of the major reasons traders lose significant amounts of money and often blow up their accounts.
Why Revenge Trading Is Bad
1. Emotional Decision-Making Replaces Strategy
When traders engage in revenge trading, they abandon their carefully crafted trading strategies and risk management rules. Instead, trades are made based on anger, frustration, or the desire to "get back" at the market. This emotional state clouds judgment, leading to irrational decisions such as increasing position sizes recklessly, disregarding stop-loss orders, or chasing trades without proper analysis. As a result, the likelihood of making successful trades plummets.
2. Escalating Losses and Account Blowups
The urge to recover losses quickly often leads traders to double down or over-leverage their positions, exposing a large portion of their capital to additional risk. Statistically, 80% of revenge trading ends disastrously, with only a small fraction experiencing temporary success before ultimately facing larger losses. This cycle of chasing losses can rapidly erode trading capital, making recovery increasingly difficult.
3. Psychological Burnout and Stress
Revenge trading is mentally and emotionally exhausting. The constant cycle of loss and frantic attempts to recover can lead to stress, depression, and burnout. This further impairs decision-making, creating a vicious cycle of poor performance and deteriorating mental health.
4. Long-Term Damage to Trading Habits
Repeatedly succumbing to revenge trading ingrains bad habits, making it difficult for traders to maintain discipline and consistency in the long run. This lack of consistency undermines the potential for sustainable profitability and can end trading careers prematurely.
Recent Real-World Examples
Recent years have seen numerous cautionary tales illustrating the dangers of revenge trading (all links are from r/wallstreetbets subreddit for learing/ educational purposes only):
Conclusion
Revenge trading is DANGEROUS AND HARMFUL because it replaces rational, strategic decision-making with emotional reactions, leading to escalating financial losses, psychological distress, and long-term damage to trading discipline. The real-world examples from the past year underscore that no trader-regardless of experience-is immune to its risks. The best defense is to recognize the urge, step away, and return only with a clear, objective mindset and a disciplined strategy.
--
Best wishes,
PandorraResearch Team 😎
Wow.. Duh..!? ..really? ... or still not!?
Briefly a month ago or so, we have examined at our wonderful PandorraResearch Team what is 'Revenge Trading', watch our recent 'Educational' idea right here (if you missed one), to learn what sort of lessons we should know about it.
Indeed, it was a really bad story, to purchase in late March 2025 most-hyped so-known Mag Seven stock that came flagships of the recent stock market collapse.
First of all, watch how it's been below (late March 2025) 👇👇
What's happened next just in a week or two since our publications has been made?
⚒ Russell 2000 Index
RUT 95% stocks were: DOWN⚒ S&P500 Index
SPX 96% stocks were: DOWN⚒ Nasdaq-100
NDX as well as Dow Jones Industrial Averages DJIA indices: 97% stocks were DOWN⚒ Magnificent Seven: ALL STOCKS WERE DOWN
Since Nasdaq-100 went back to pre-pain 20'000 Level, lets repeat some lessons.
Revenge trading is DANGEROUS AND HARMFUL pracrice where traders, after suffering a loss, attempt to immediately recoup their losses by making impulsive, emotionally-driven trades. This behavior is widely recognized as one of the major reasons traders lose significant amounts of money and often blow up their accounts.
Why Revenge Trading Is Bad
1. Emotional Decision-Making Replaces Strategy
When traders engage in revenge trading, they abandon their carefully crafted trading strategies and risk management rules. Instead, trades are made based on anger, frustration, or the desire to "get back" at the market. This emotional state clouds judgment, leading to irrational decisions such as increasing position sizes recklessly, disregarding stop-loss orders, or chasing trades without proper analysis. As a result, the likelihood of making successful trades plummets.
2. Escalating Losses and Account Blowups
The urge to recover losses quickly often leads traders to double down or over-leverage their positions, exposing a large portion of their capital to additional risk. Statistically, 80% of revenge trading ends disastrously, with only a small fraction experiencing temporary success before ultimately facing larger losses. This cycle of chasing losses can rapidly erode trading capital, making recovery increasingly difficult.
3. Psychological Burnout and Stress
Revenge trading is mentally and emotionally exhausting. The constant cycle of loss and frantic attempts to recover can lead to stress, depression, and burnout. This further impairs decision-making, creating a vicious cycle of poor performance and deteriorating mental health.
4. Long-Term Damage to Trading Habits
Repeatedly succumbing to revenge trading ingrains bad habits, making it difficult for traders to maintain discipline and consistency in the long run. This lack of consistency undermines the potential for sustainable profitability and can end trading careers prematurely.
Recent Real-World Examples
Recent years have seen numerous cautionary tales illustrating the dangers of revenge trading (all links are from r/wallstreetbets subreddit for learing/ educational purposes only):
- $40,000 Lost on NVDA Options (2024). A trader repeatedly doubled down on Nvidia (NVDA) put options during its price rally in mid-2024. Despite initial small wins, the trader, driven by the urge to recover losses, continued to increase his position size, ultimately losing over $40,000.
- $26,000 Lost in 20 Minutes on SPX. A Reddit user reported losing $26,000 in about 20 minutes trading the S&P 500 index (SPX) after prices dropped sharply. The loss was the result of impulsive trades made in an attempt to quickly recover from earlier setbacks.
- From $27,000 to $0 in Three Days. Another trader turned $500 into $27,000 in just a few days, only to lose it all within 48 hours after a market reversal. Instead of taking profits or stepping back, the trader kept chasing losses with increasingly risky trades, ending up with nothing.
- $100,000 Loss on a Yen Carry Trade. A trader, influenced by news of geopolitical tensions, made a large leveraged bet on the yen. After an initial loss, he refused to cut his losses and doubled down, ultimately losing $100,000 instead of accepting a smaller $30,000 hit.
- More juicy stories are to be collected...
These stories are not isolated incidents. They are echoed across trading forums and social media, serving as stark warnings of how quickly revenge trading can destroy even substantial gains.
Conclusion
Revenge trading is DANGEROUS AND HARMFUL because it replaces rational, strategic decision-making with emotional reactions, leading to escalating financial losses, psychological distress, and long-term damage to trading discipline. The real-world examples from the past year underscore that no trader-regardless of experience-is immune to its risks. The best defense is to recognize the urge, step away, and return only with a clear, objective mindset and a disciplined strategy.
--
Best wishes,
PandorraResearch Team 😎
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.