For newer traders and veterans alike, revenge trading can become a big problem and lead to over trading. When a trade goes against you we sometimes feel the need to get back to even, or make it back on the next trade in the market that took it from us in the first place. This in turn leads to more losses.
The most important thing about trading is knowing when to stop. Having a rule, or line in the sand as to what dollar amount or loss you will stop trading BEFORE you place your first trade is vital to keeping your account alive. Remember, the market will always be there, but you won’t if you blow up your account.
Here I talk about the 3 Trading Mistakes You Cannot Afford to Make and how to avoid them.
So find a hobby or fun activity that takes your mind off trading, preferably outdoors, for during those rough times or when the markets are closed. Whether it’s hiking, biking, running, playing sports, working out or golf, studies have shown that being outside in green spaces like gardens and parks can act as a recharger to the mind, and as traders, we always need to be on top of our game.