The Hidden Cost of Revenge Trading

Have you ever taken a small, manageable loss, only to feel a sudden surge of frustration? Five minutes later, you're back in the market with double the position size, trying to "win it back."

That is Revenge Trading. It is the most common reason why otherwise profitable trading strategies fail.

Why Revenge Trading Happens

Revenge trading is an emotional response to a loss. Your brain perceives the loss as a personal attack or a mistake that needs to be corrected immediately. Instead of following your plan, you follow your ego.

The Financial Impact

The cost of revenge trading isn't just the money you lose on that specific trade. It's the "Behavioral Alpha" you're throwing away.

For many traders, their system might have a positive expectancy, but their revenge trades single-handedly turn their equity curve downward.

How to Track It with Artha

Using Artha's automated journaling, you can tag these trades specifically:

1. Auto-Sync: Let Artha pull your trades instantly.
2. Tagging: Apply the "Revenge Trade" or "Emotional Entry" tag.
3. Analyze: Use the Psychology Insights dashboard to see exactly how much your revenge trades cost you per month.

Identifying the pattern is the first step to breaking it. By seeing the literal dollar amount your ego is costing you, it becomes much easier to walk away after a loss.