What is 'Revenge trading' in Investing?

Published - March 13, 2018 12:15 am IST

This refers to a style of trading in financial markets that is motivated purely by the goal of recovering previous losses from the market. The market is seen as an enemy that imposed unjustified losses and the trader is keen on recovering the losses from the market. Traders who engage in revenge trading allow their personal emotions to override their rational thought process during trading, thus increasing the risk of making more mistakes that could lead to further losses. Revenge trading is considered to be one of the major reasons why many traders get wiped out of the market.

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